The Internet, Personal Jurisdiction, and DAOs

Authors

Matthew R. McGuire, DeFi Labs, GmbH

Abstract

Global connectivity is at an all-time high, and sovereign state law has not fully caught up with the technological innovations enabling that connectivity. TCP/IP—the communications protocol allowing computers on different networks to speak with each other—wasn’t adopted by ARPANET and the Defense Data Network until January 1983. That’s only forty years ago. And the World Wide Web wasn’t released to the general public until August 1991, less than thirty-five years ago. The first Bitcoin block was mined on January 3, 2009, less than fifteen years ago.

Legal doctrine doesn’t develop that fast, especially in legal systems heavily based around judicial precedent like the United States. The disconnect between the global, instant connectivity that internet-based technology makes possible and traditional legal and State regulatory actors has never been more apparent. In the past year, the United States, through its administrative agencies controlled by the Executive branch, has brought numerous enforcement actions against Web3 and crypto projects. Some of these projects and their members have been based in the United States, and others have, at best, limited connections to the United States’s territorial borders.

This Essay calls attention to the way the Internet, and Web3 in particular, has raised constitutional concerns about how United States agencies approach personal jurisdiction. Understanding these constitutional limits is critical for anyone considering forming or participating in a Decentralized Autonomous Organization (“DAO”). Intentional, thoughtful consideration of the issues presented here will ensure that DAOs and their members take on legal obligations in the United States knowingly and responsibly. A corollary is also true: DAOs and their members should fully consider their possible defenses and rights when confronted with the next overreaching enforcement action.

Recommended Citation

Matthew R. McGuire, The Internet, Personal Jurisdiction, and DAOs, 80 Wash. & Lee L. Rev. 1217 (2023).
Available at: https://scholarlycommons.law.wlu.edu/wlulr/vol80/iss3/8