# kaal:claim:4067783-009

**Claim.** Most DAOs that suffer unethical behavior and rug pulls are abused by insiders, and this is possible because insiders are not properly governed and hold too much control over the DAO; true decentralized community governance removes insider and council control over keys and code.

**Type.** mechanism  **Support.** argued

**Holds when.**

- DAOs where councils or privileged insiders retain key and code control

**Source quote.**

> Most DAOs that fall victim to unethical behavior and rug pulls are subject to abuses from insiders. Typically these insider abuses are possible because the insiders are not governed properly and have too much control over the DAO.

**From.** Wulf A. Kaal, *DAO Fallacies* (2022), II.2.a) Insider Abuses, page 6

**Cite as.** Wulf A. Kaal, DAO Fallacies (2022). SSRN: https://ssrn.com/abstract=4067783

**Verify.** sha256 of source PDF `48f1e307cdbbe28c7843f7744d0ba8cf01662f257a53f2066a7a6c7e03a5acec` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202022%20-%20DAO%20Fallacies.pdf

**Failure mode.** Privileged insider control of keys and code  (family: fraud-and-misconduct)

**Topics.** decentralization, governance-design

**Keywords.** insider-abuse, key-control, decentralized-governance, rug-pull

**Related claims.**

- restates: https://wulfkaal.github.io/claims/4015908-025
- extends: https://wulfkaal.github.io/claims/4015908-041

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.