Do securities laws apply to investments made through a DAO?

Select jurisdiction

  • Germany
  • Poland


As in this regard currently no specific laws exist, the general securities laws apply.This
requires that the respective investment asset falls within the scope of the relevant laws,
which is the case when the investment asset qualifies as a security. Regarding securities
law, German law basically differentiates between civil law and regulatory law. This means
that a token that qualifies as a security according to regulatory securities law, does not
necessarily fall within the scope of civil securities law. According to the current authority
practice (BaFin), security tokens tend to qualify as securities according to regulatory law.
Certain investment tokens fall within the scope of the specific civil securities law (Electronic
Securities Act; Gesetz über elektronische Wertpapiere – eWpG) as well. Currency tokens and utility tokens, on the contrary, do not tend to qualify as securities.  Even if a given investment asset falls within the scope of securities law, from the perspective of the DAO it has usually no significant legal implications. Basically, securities laws impose
obligations for the issuer and not for the purchaser/investor. When making an investment, the DAO acts as an investor just like any other person or legal entity. Obviously, if the DAO
issues securities, it should observe the relevant securities laws, but this is a different
question. As DAOs mainly invest in tokens, only these assets are covered here. Please note that in the unlikely case that the DAO invests in other assets other principles may apply.

Zsofia Vig

Banking and Capital Markets Law (DeFi/Web3, Crypto in general, tokenized Securities)


Securities laws are in place to protect investors and maintain the integrity of financial markets. In Poland, securities regulations are governed by the Act on Trading in Financial Instruments and other related laws, as well as directives and regulations from the European Union. If a DAO issues tokens or other digital assets that are deemed to be securities under Polish law, the DAO and its participants may be subject to securities laws and regulations. Some factors that may determine whether a token or digital asset is considered a security include:

1. The way the token or digital asset is structured, marketed, and sold.

2. The rights and benefits granted to the token holders, such as profit-sharing, voting rights, or ownership interests in underlying assets.

3. The expectation of profit derived from the efforts of others (i.e., whether the token is
considered an investment contract).

If a DAO’s tokens or digital assets are considered securities, the DAO may be required to comply with various regulations, such as:

1. Registering the securities offering with the appropriate authorities, such as the Polish
Financial Supervision Authority (KNF).

2. Providing investors with detailed and accurate information about the offering, including
risks, terms, and conditions.

3. Complying with ongoing disclosure and reporting requirements.

Maciej Niezgoda

Intellectual Property, Data Protection, DeFi, Fintech, AML

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