
Crypto assets - ojengwa
What are the legal implications of running a crowd-sourced &#x27;hedge fund&#x27; for digital assets?
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F11tofreedom
It sounds like you're implying there's no manager of your blockchain, so maybe
a better term is unmanaged investment fund or securities pool. Tax
implications would be a major subset of legal implications. Investment funds
usually begin as limited liability partnerships, so that they can dividend to
their members in accordance with various tax requirements. But there are other
legal implications affecting digital assets. How do you deal with the
inheritance of a member who's died or entered receivership? You might also
find that being a member of the securities pool is more valuable than the
assets required to do so (your sway on voting might be more valuable than what
you'd get by cashing out); selling your membership would be a legal matter. My
story: your securities pool may unmanaged by a particular human, but the legal
status of a firm with no human oversight isn't well-tested. For example, I've
setup a limited partnership with a charter oriented toward being managed
entirely in software. In my state, an LLC is formed by one or more humans plus
an agreed charter. A charter is usually quite boring, but mine explicitly
states that the human partners' stakes may be bought out by the software when
certain goals for continuity are achieved. In my state, an LLC is dissolved if
more than 50% of its share leaves the company, typically when a partner dies.
It is not clear whether an LLC with no more human partners is legally
dissolved -- you may be able to fulfill your state's requirements for a
limited liability partnership without a human partner. For example, your
accounting services would be arranged by software, and the bills and
bureaucracy could be handled without human intervention. When I took this
charter to a bank, they had no problems setting me up, so long as a majority
of my business didn't come from marijuana.

