ABSTRACT
As blockchain technologies and cryptocurrencies transition from experimental niches to critical infrastructure, their social and economic impacts have sparked intense regulatory and judicial scrutiny. Central to this debate is the legal classification of network participants – including developers, founders, and governance token-holders – and the extent of their legal obligations to the public and one another.
This paper examines the burgeoning trend of courts and scholars to characterize these relationships as fiduciary in nature or to categorize Decentralized Autonomous Organizations (DAOs) as general partnerships. Analyzing key litigation such as Tulip Trading Ltd. in the UK and recent DAO-related rulings in the US, we explore the significant risks of joint and several liability and nationwide personal jurisdiction that now face industry participants.
We argue that the imposition of implicit fiduciary duties on blockchain participants is fundamentally improper. Such a move misapplies traditional corporate legal doctrines to decentralized architectures, risks stifling technological innovation, and may deter the broad-based participation essential to these systems. Drawing on our experience developing the COALA DAO Model Law (2022), we advocate for a shift away from status-based duties. Instead, we propose a co-regulatory approach grounded in the principle of regulatory equivalence. By prioritizing system-wide transparency, accountability, and novel governance frameworks, regulators can protect public interests without compromising the core principles of decentralization and autonomy.
Mannan, Morshed and De Filippi, Primavera, The Fiduciary Duties of Network Participants of Blockchain Systems (May 1, 2025).
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