Hong Kong lawmaker calls for legal framework to regulate DAOs following Mantra's court case

Johnny Ng, a Hong Kong lawmaker, urged that the Hong Kong government should explore regulating the operations of decentralized autonomous organizations (DAOs), as the city’s High Court recently ordered defendants to disclose financial records related to a DAO project, according to local media reports.

Ng, a member of the Hong Kong Legislative Council, told local media on Monday that the government should introduce a legal framework for operating DAOs in a bid to develop Hong Kong into a global Web3 hub.

Ng’s comment comes after a court last week provided reasons for a ruling that ordered six defendants to disclose financial records associated with Mantra DAO, Hong Kong newspaper the South China Morning Post reported. In the case, the plaintiffs accused the defendants of misappropriating assets of the DAO project, while the defendants argued that the ownership lies with token holders.

Mantra DAO’s market cap currently stands at around $740 million, compared to $1.1 billion on July 22, according to DefiLlama data.

The lawmaker added that the case could be a crucial legal precedent for the Web3 industry. Ng has previously called for easier banking access for crypto firms in Hong Kong. 

Hong Kong rolled out the welcome mat for crypto firms last year, and in June 2023, it officially started a crypto licensing regime for crypto trading platforms, allowing licensed exchanges to offer retail trading services.