Legal risks for DAOs like CityDAO controlling physical infrastructure, such as land ownership, include regulatory ambiguity, liability concerns, and compliance challenges. In the U.S., DAOs may be treated as unincorporated partnerships, exposing members to unlimited personal liability if sued or hacked. Wyoming’s 2021 DAO law offers LLC protections, but uncertainties persist around tax treatment, securities laws, and legal standing outside the state. Token-based voting risks plutocracy, while low engagement can hinder governance. Fractional land ownership on blockchain faces regulatory restrictions, and environmental concerns arise from energy-intensive blockchain operations. DAOs must navigate local laws, property rights, and community relations to avoid disputes. Robust lifecycle planning and legal frameworks are critical to mitigate risks and ensure compliance.