Writing an article about MakerDAO and flagging the > 60% of assets held with Circle as a risk. With the dissolution of the Maker Foundation, what will the legal situation be if a dispute arises between MakerDAO and Circle?
I would appreciate if the following points could be addressed:
Whom would be the party to Circle’s “USDC User Agreement” if any USDC held by Maker was blacklisted?
Possible unlimited liability
In the event of litigation between the beneficiaries of Maker and Circle, are the assets of Maker’s beneficiaries held in a limited liability structure, or could the DAO be considered merely an unincorporated association with unlimited liability?
Authority to instruct counsel
Outside of the RWA unit, do any of the MakerDAO contributors have experience instructing attorneys in banking / finance context? Who has authority to give instructions to a law firm on behalf of the DAO and what is the basis for this authority?
Origin of funds
If there is an allegation that funds held by MakerDAO (in Circle/USDC or otherwise) are commingled with the proceeds of crime, what procedures does the DAO have in place to satisfy any third party (including legal representatives) of the origin of funds? Is there a ring fenced pool of funds to pay legal expenses which has a demonstrably “clean” origin?
In the event that some or all of the USDC is frozen, it does not seem that the market cap of MKR would support sufficient new MKR token issuance to restore full backing to DAI. As any freeze could result in protracted negotiations and a prolonged period of uncertainty, what approach would the DAO take to maintain the DAI peg in the interim?