The 1inch decentralized autonomous organization (DAO) has taken a significant step by voting to hire permanent legal counsel from Geneva-based Web3 solutions provider Storm Partners. This decision, taken on January 9, 2024, with an overwhelming 96.45% majority in favor, aims to help 1inch face the challenges posed by its decentralized nature.
The legal services provided by Storm Partners will cover a wide range of aspects crucial to 1inch's operation, including regulatory compliance checks, entity structuring, governance policy development, contractual support, intellectual property protection, and legal defense against external claims.
This move comes in response to the increasing tendency of courts to apply traditional legal principles around corporate liability and regulatory obligations to decentralized entities. Recent cases in Europe and the United States have highlighted this trend. The 1inch statement emphasized the need for an organization with ambitions in the finance sector to confront and address its legal challenges proactively.
Storm Partners will also assist in drafting governance rules and policies for 1inch, aligning them with community decisions. The DAO has allocated a retainer fee of 50,000 USD Coin (USDC) to the law firm for this purpose.
Nicola Massella, director of the Legal and Compliance department at Storm Partners, commented on the engagement, stating that it is intended to complement rather than replace the community's self-regulatory abilities. He underlined that the community retains full control over the governance of 1inch DAO, with Storm's task being to convert decisions into structured rules and legal frameworks.
This partnership sets a historic precedent as it is the first instance of a DAO hiring a legal team directly. However, it raises questions about the balance between legal compliance and maintaining the decentralized ethos that defines DAOs.
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