The "investors" risk losing all their money, and the curators and contractors risk going to prison because they are conducting an illegal securities offering with no valid exemption.
They may lose money, they may make some. But it's a grand experiment of a kind that's never been tried before and I'm curious to see the results.
At least german authorities will be interested since Slock.it UG is registered there.
NB: They do not even have a website that is conformant with german law. This is not a big deal, however, it does not strengthen my confidence that these guys are able to create code able to manage a few hundred million dollars crowdfunded capital.
This is the fundamental premise of decentralized systems. They are resilient to the interventions of governments. Bitcoin is definitely illegal in many places in the world, and occupies something of a gray area in the US. Yet, it operates just fine.
How relevant is China's law for an US citizen who doesn't leave the country?
Try setting up a business in one of them and let me know how you like the environment.
There are tons of examples of this happening in practice, in the real world, right now. All you have to do is look.
Don't get me wrong, even though i'm invested in the DAO a bit, I fully expect there will be serious disasters like this along the way. I'm not blind to how overwhelmingly likely it is that at least some people will run off with at least some of the money they get. But I do think these issues will get shaken out over time. And then we'll simply be left with: is it a good idea to let the wisdom of crowds make investment decisions? (also, likely the answer here is an emphatic: no, but it'll be interesting to find out).
There might be an exception when the extradition request is issued by an EU country, but I'm not sure how this would be handled. Afaik the EU requires member states to extradite citizens and non-citizens to other member states. However, (afaik) the law that prevents Austria from extraditing its own nationals is at the constitution level.
Austria did reserve the limited possibility of refusing enforcement of EAWs on its citizen for acts not punishable under Austrian law, but that's it; which is not much different from the optional non-execution provision available to all EU states.
It also has bilateral extradition treaties with other non-EU states including the USA, again, with some reservations for its own citizens. But to say Austria doesn't extradite its citizens is wrong. For most crimes, any other EU state can issue a warrant and have Austrian citizens arrested and summarily removed without any full-blown extradition proceeding.
The law for this is "§ 12 ARHG Verbot der Auslieferung österreichischer Staatsbürger" which is part of the Austrian constitution: http://www.jusline.at/12_Verbot_der_Auslieferung_%C3%B6sterr...
https://books.google.com/books?id=0H5XqvUu3B4C provides an English explanation of that law:
1173. Extradition of Austrian nationals is not admissible pursuant to Article 12, paragraph 1 of the ARHG. The authorities mentioned that this provision has the rank of a constitutional provision and, as such, requires a 2/3 majority of Parliament to be amended. Nevertheless, as of January 1, 2009, Austria will be in a position to extradite its own nationals to other EU-Member States in accordance with Section 5 EU-JZG.
1174. Where extradition for ML is denied on the sole ground of nationality, the Austrian courts are competent under Article 65, paragraph 1, no. 1 of the StGB (jurisdiction over acts committed by Austrians abroad) and must conduct the proceedings in the same way as for any other criminal offense under national law. The Austrian courts also have explicit jurisdiction over terrorist acts and terrorist financing when the perpetrator is Austrian (Article 64, paragraph 1, nos. 9 and 10 of the StGB).
That strategy didn't work out too well for Zenefits.
PG has expressed a view that he favors start ups that push regulatory boundaries, but I'm sure his view is more nuanced than such a blanket statement.
So no disclosure laws necessary!
And honestly nobody in the international community cares about other country's securities laws. You can copy and paste some small exemption text from bank's private placements, so something for the UK, Hong Kong, Japan to make it also exempt.
The DAO itself relies on sanctioning from Switzerland just like Ethereum, so I'd say all the bases are covered, until it gets challenged.
But individual liability for all parties is pretty mitigated from the threat of securities regulators.