Last year, the ConstitutionDAO raised over $47 million for the purpose of purchasing an original copy of the U.S. Constitution at a Sotheby’s auction. In return for their contribution, the DAO issued PEOPLE tokens, which were going to represent ownership of the Constitution and would be utilized for governance i.e. how to maintain the Constitution.
While the ConsitutionDAO successfully raised capital, it failed to win at auction. Hedge Fund billionaire Ken Griffin swooped in and outbid the people, in a move that has been widely panned as tone-deaf.
The PEOPLE tokens issued by the DAO no longer have any use as it has disbanded, but somehow their value has actually increased. These tokens hold over 6 times the amount they were originally worth.
WLG Partner and Chair of Securities Litigation, Jon-Jorge Aras believes, “because the popularity and use of DAOs continue to grow, it is natural to see new legal issues present themselves. The rise in value of PEOPLE tokens brings a DAO contribution closer to the realm of securities and could lead to more regulatory oversight.”
Whether PEOPLE tokens are used for another project remains to be seen.
If you’re interested in leveraging blockchain assets like DAOs to raise capital for your business or venture it is important you seek proper legal counsel. Contact the attorneys at Warren Law Group by emailing firstname.lastname@example.org, or call (866) WLGROUP.