Subscribe To Our Newsletter

    Get the latest crypto news right into your email box. No spamming. We hate it too. Only pertinent news you need to know

    Latest News

    Coinbase Fixing Problem That Halted Payments From US Banks

    October 9, 2022

    Binance May Spend Over $1 Billion This Year on Deals, CZ Says

    October 9, 2022

    Crypto Real Estate Is Here – Bitcoin Mortgages Are Just The Beginning

    May 1, 2022
    Facebook Twitter Pinterest LinkedIn
    RareHippo – Crypto, Bitcoin, Blockchain News & Views
    Facebook Twitter Pinterest LinkedIn
    • Home
    • Bitcoin
    • NewsWire
      1. Latest News
      2. Top Stories
      3. Features
      4. What’s Hot
      5. Must Read
      6. Trending
      7. Spotlight
      8. Editors’ Picks
      9. View All

      Coinbase Fixing Problem That Halted Payments From US Banks

      October 9, 2022

      Binance May Spend Over $1 Billion This Year on Deals, CZ Says

      October 9, 2022

      El Salvador’s Companies Barely Bother With Bitcoin

      March 19, 2022

      New Jersey legislation aims to prevent public officials from being gifted NFTs

      March 18, 2022

      Coinbase Fixing Problem That Halted Payments From US Banks

      October 9, 2022

      Crypto Real Estate Is Here – Bitcoin Mortgages Are Just The Beginning

      May 1, 2022

      Crypto’s Preferred Currency for Political Donations Isn’t Bitcoin. It’s Dollars

      March 19, 2022

      Meta Sued by Australian Watchdog Over Scam Crypto Advertisements

      March 18, 2022

      Binance May Spend Over $1 Billion This Year on Deals, CZ Says

      October 9, 2022

      Two Senators propose crypto legislation for tax exemption on capital gains

      May 1, 2022

      Wall Street Reluctantly Embraces Crypto

      May 1, 2022

      Warren bill draws outcry over broad terms, but seems unlikely to pass

      March 20, 2022

      Crypto Real Estate Is Here – Bitcoin Mortgages Are Just The Beginning

      May 1, 2022

      Russia-Ukraine War Is Bringing Out the Good, Bad, & Ugly of Cryptocurrencies

      March 18, 2022

      The ‘world’s most advanced’ digital human wants you to buy her NFT art

      March 15, 2022

      FTX crypto exchange wins license in Dubai to open regional headquarters

      March 15, 2022

      Crypto Startup Founded by Ex-Meta Employees Raises $200 Million

      March 16, 2022

      U.K. Crime Agency Wants to Regulate Crypto Transaction Mixers

      March 15, 2022

      A Wall Street Quant Turns His Crypto Firm Into a Unicorn

      March 14, 2022

      Standard Chartered’s crypto custodian to help clients earn yield on token holdings

      March 14, 2022

      Man passing as UN affiliate convicted for crypto scheme

      March 18, 2022

      The Future of Crypto Is Boring — and Bright

      March 15, 2022

      Investors turn to crypto funds, companies as Russia-Ukraine crisis escalates

      March 15, 2022

      Binance Wins Crypto Licenses From Dubai, Bahrain

      March 15, 2022

      Why Bitcoin’s Environmental Problems Are So Hard to Fix

      March 16, 2022

      Americans Want Crypto From Their Banks

      March 15, 2022

      Why Decentralized Exchanges Are Important in the Crypto Economy

      March 10, 2022

      Binance plots M&A spree as regulators scrutinize crypto trading unit

      March 10, 2022

      Amid New Executive Order, White House Director Sheds Light On Crypto Policy

      March 16, 2022

      Bitcoin Evangelist Saylor Tells Economists Why They’re Wrong

      March 15, 2022

      Crypto Mania in Texas Risks New Costs and Strains on Shaky Grid

      March 15, 2022

      Bitcoin’s scared of commitment, Mr. Biden

      March 15, 2022

      Coinbase Fixing Problem That Halted Payments From US Banks

      October 9, 2022

      Binance May Spend Over $1 Billion This Year on Deals, CZ Says

      October 9, 2022

      Crypto Real Estate Is Here – Bitcoin Mortgages Are Just The Beginning

      May 1, 2022

      Two Senators propose crypto legislation for tax exemption on capital gains

      May 1, 2022
    • Altcoins
      • Ethereum
      • XRP-Ripple
      • Solana
      • Dogecoin
      • Cardano
      • Shiba Inu
    • Topics
      • Cryptocurrencies
      • Investments
      • Markets
      • NFTs
      • DeFi
      • ETFs
      • DAOs
      • Crypto Regulation
      • Metaverse
      • Blockchain & Web3
      • Blockchain Gaming
      • Crypto Exchanges
      • Crypto Mining
      • Stablecoins
      • Cybersecurity
      • Digital Currencies – CBDC
      • Crypto Book Reviews
      • Technology
      • Internet of Things
    • Opinions
    • Explainers
    • Press Releases

      Former Uber LatAm Head of Policy Leads Crypto Ride-Hailer Drife Toward Planned Global Expansion

      March 7, 2022

      European index provider for crypto assets Vinter raises $3.4m funding

      February 22, 2022

      PR – British crypto processor brings in $60 million for expansion in Europe

      January 25, 2022

      PR – CoinMENA obtains 2nd crypt0 license from European Union

      January 25, 2022

      NFT investment specialist looks to acquire Pluto Digital for £96m

      January 24, 2022
    RareHippo – Crypto, Bitcoin, Blockchain News & Views
    Home»DAOs»Crypto-Funded DAOs Are Becoming Charities, Raising Legal Questions
    DAOs

    Crypto-Funded DAOs Are Becoming Charities, Raising Legal Questions

    By Sean Stein Smith
    March 7, 2022By See Source Below4 Mins ReadNo Comments
    Facebook Twitter LinkedIn Pinterest Reddit WhatsApp Email Tumblr VKontakte Telegram
    Share
    Facebook Twitter Pinterest Reddit WhatsApp Email LinkedIn Tumblr Telegram

    Cryptocurrency is becoming a more familiar way to pay for things. One way of doing so is as part of a crowd, through decentralized autonomous organizations– or DAOs.

    In this relatively new kind of group, decisions and choices are governed by holders of one kind of cryptocurrency token, such as Ethereum or Bitcoin, and using “smart contracts” that make decisions through online votes by all participants who wish to weigh in and other forms of automation.

    Donate to RareHippo Now!

    DAOs are essentially clubs that harness both crowdfunding and cryptocurrencies to operate in arenas ranging from media and art to sports (and even fashion, thereby, giving consumers a stake in community-owned brands). They are also cropping up in the world of philanthropy.

    One example is Big Green DAO. Launched in late 2021 by founder Kimbal Musk, the brother of Elon who sits on the board of Telsa, Big Green DAO is tied to a decade-old food justice charity that had revenue in excess of $9 million in 2019. The DAO version of Musk’s nonprofit promises to “disrupt philanthropic hierarchies” by reducing overhead spending and shaving other expenses.

    DAOs Bring New Terrain
    With the rise in charity-focused DAOs, there are several considerations that donors and charities should keep in mind. First, DAOs have little if any formal infrastructure. Some states simply require one individual to be designated as the agent of record.

    Wyoming passed a law in 2021 – the first of its kind in the United States – that legally recognizes DAOs as legal entities. It still requires the DAO to be organized as a Wyoming-based limited liability company, with an individual identified as the registered agent.

    In theory, at least, when combined with the quick nature of how DAO decisions are made, this means that nonprofits can achieve more and respond more quickly to changing circumstances, while spending less on administrative staff and other kinds of overhead.

    Legal Questions
    Until now, most cryptocurrency donations to charities simply provided capital to eligible organizations that operate like any other standard nonprofit. For tax purposes, donating cryptocurrency is like giving away stocks, bonds or other property, rather than donating money.

    This means, typically, that cryptocurrency donations actually provide donors with a larger tax benefit versus cash donations. If a donor were to, instead, liquidate their cryptocurrency prior to making a gift, they would first have to pay capital gains taxes, and they would have less money to give away.

    However, it is unclear whether funds can legally flow to, through and out of a charitable decentralized autonomous organization.

    Nonprofits are subject to regulatory enforcement and need to be chartered in a particular state. So far, it is unclear how regulators, such as the Internal Revenue Service or state charity offices, will be able to monitor or audit these groups. It is also unclear whether the very nature of DAOs is compatible with charitable donations.

    In most, if not all, instances of for-profit DAOs – or even DAOs organized for a specific one-time purpose, such as attempting to purchase an original copy of the U.S. Constitution – cash or appreciated property that is contributed to the organization is exchanged for governance tokens. The tokens essentially represent a fractional form of collective ownership. This could be problematic.

    When donors make charitable contributions, they relinquish the money or asset they just gave to the charity. A basic condition for having a donation be eligible for favorable tax treatment by the authorities is that the donor gets nothing of value in return.

    Authorities may eventually determine that the distribution of virtual tokens to donors, even if those tokens are not used for anything outside the scope of the nonprofit, violates this precondition.

    Wild Rides
    The clearest risk with those gifts is probably their volatility. Overall, the cryptocurrency’s total market value sank to $1.6 trillion on February 3, 2022, down from $2.85 trillion three months earlier. Charities either need to convert these donations into U.S. dollars right away, as they do with donated stocks, or gamble regarding their future value.

    Despite the operational, financial, and legal obstacles nonprofit DAOs face, the opportunities with these crowd-managed charities funded by cryptocurrency donations are, nonetheless, exciting because of their potential for a high degree of transparency paired with low overhead.

    Sean Stein Smith is an Assistant Professor of Economics and Business at Lehman College, CUNY. (This article was initially published by The Conversation.)

    Read full story on The Fashion Law

    DAOs
    Previous ArticleManchester City’s new Crypto sponsor offering banned product to UK consumers
    Next Article Can speed-hungry hedge funds make hay from crypto volatility?

    Related Posts

    Coinbase Fixing Problem That Halted Payments From US Banks

    October 9, 20221 Min Read

    Binance May Spend Over $1 Billion This Year on Deals, CZ Says

    October 9, 20223 Mins Read

    Crypto Real Estate Is Here – Bitcoin Mortgages Are Just The Beginning

    May 1, 20224 Mins Read

    Two Senators propose crypto legislation for tax exemption on capital gains

    May 1, 20225 Mins Read

    Wall Street Reluctantly Embraces Crypto

    May 1, 20225 Mins Read

    Warren bill draws outcry over broad terms, but seems unlikely to pass

    March 20, 20225 Mins Read
    Add A Comment

    Leave A Reply Cancel Reply

    Donate to RareHippo Now!
    Latest News

    Coinbase Fixing Problem That Halted Payments From US Banks

    October 9, 2022

    Binance May Spend Over $1 Billion This Year on Deals, CZ Says

    October 9, 2022

    Crypto Real Estate Is Here – Bitcoin Mortgages Are Just The Beginning

    May 1, 2022

    Two Senators propose crypto legislation for tax exemption on capital gains

    May 1, 2022

    Wall Street Reluctantly Embraces Crypto

    May 1, 2022
    Follow US & Win Prizes
    • Facebook
    • Twitter
    • LinkedIn
    • Pinterest
    Don't Miss
    Bitcoin

    Like ‘The 1929 Crash’—New Crypto Winter Warning As Sell-Off Wipes $1.5 Trillion Crypto Market

    January 22, 20224 Mins Read

    The bitcoin price has this week fallen to levels not seen since July last year,…

    Ethereum layer 2 network Optimism removes whitelist, opens to all developers

    December 17, 2021

    MetaTerrace: step into the future at a metaverse-themed restaurant in Dubai

    December 31, 2021

    SEC Scrutinizes NFT Market Over Illegal Crypto Token Offerings

    March 3, 2022

    Subscribe to Our Newsletter

    Get the latest crypto news right into your email box. No spamming. We hate it too. Only pertinent news you need to know

    Crypto news & Views
    Facebook Twitter Pinterest LinkedIn
    • Home
    • Privacy Policy
    • About Us
    • Donate to RareHippo
    • Get In Touch
    • NewsWire
    © 2023 RareHippo. Powered by 8 Dimensions

    The content of this website is for informational purposes only and is not intended as a substitute for investment or financial advice.

    Type above and press Enter to search. Press Esc to cancel.