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Lesson # 4
DAO Legalities & Compliance
Blockchain Basics
1. Why is jurisdiction important for a DAO?
A. It helps DAOs launch NFTs faster
B. It determines which blockchain to use
C. It defines which country's laws apply to the DAO and its members
D. It allows DAOs to remain anonymous legally
2. What is the main benefit of forming a DAO LLC (e.g., in Wyoming)?
A. Tokens automatically gain value
B. Provides legal status and limited liability protection for DAO members
C. It allows DAOs to mine cryptocurrencies
D. It removes the need for governance rules
3. Which of the following best describes the relationship between smart contracts and legal frameworks?
A. Smart contracts fully replace legal systems
B. Smart contracts automate actions, while legal frameworks cover off-chain matters like liability and compliance
C. Legal systems are not relevant to DAOs
D. Smart contracts are slower but more flexible than legal processes
4. What major legal lesson did the 2016 DAO Hack teach the Web3 world?
A. Smart contracts can never be hacked
B. Ethereum is a secure platform for all DAOs
C. Smart contracts are not enough—legal planning and compliance are essential
D. Airdrops protect DAOs from regulation
5. What is a “legal wrapper” in the context of a DAO?
A. A browser extension for DAO tools
B. A traditional legal structure (e.g., LLC, foundation) that surrounds a DAO’s on-chain activity
C. A type of staking contract
D. A tax-avoidance tool for DAOs