The UK will no longer introduce new regulations to supervise DAOs，The existing regulatory functions are sufficient

Governance tokens that resemble shares, offer voting rights, and are issued in exchange for investments are classified as specified investments. Promoting these tokens could be restricted under UK promotion rules.

DAOs are being regulated

DAOs are currently under legal scrutiny in both the UK and the US. Due to their diverse structures, a single legislative approach is seen as inappropriate.

The commission stated that at this early stage, creating a bespoke legal framework for DAOs is not recommended. There is no consensus on DAO structure or specific entity requirements.

The applicable public law for a DAO depends on its type. Some may be unincorporated associations with participants liable only for their actions.

DAOs may need to pay corporation tax, and an international tax framework should be considered.

Even fully decentralised DAOs could face civil action, regulatory enforcement, or criminal prosecution. A smart contract is recognised as a legal contract.

Contribution to the Law Commission of England and Wales

The commission has previously contributed to legislation enabling distributed ledger technology for trade. They have also proposed legislation to classify crypto as property.

The report suggests that a body like the Jurisdiction Taskforce should analyse when fiduciary duties might apply to software developers.

The Law Commission of England and Wales concludes that existing regulations sufficiently cover DAOs, eliminating the need for a new legal framework. They acknowledge the complex nature of DAOs and the necessity for further analysis on specific legal implications.