Compliance with Local and International Nonprofit Regulations

The Cathedral Foundation DAO operates in full compliance with the nonprofit regulatory environment of Estonia, ensuring alignment with international standards for nonprofit organizations. Key areas of compliance include financial reporting, tax obligations, anti-fraud measures, and adherence to cross-border regulations.

Financial Reporting and Tax Compliance

As a registered nonprofit in Estonia, the Cathedral Foundation DAO is required to maintain clear, transparent financial records. These records must demonstrate that all funds raised are directed toward the fulfillment of the DAO’s mission, with no profits distributed to individual members or founders. The DAO submits annual financial reports to the Estonian Tax and Customs Board, providing detailed transparency on the use of funds, including donations, grants, and project expenditures.

• Tax Exemption Status: In Estonia, nonprofit entities are eligible for certain tax exemptions, provided they comply with their nonprofit purpose. The Cathedral Foundation DAO ensures compliance by adhering to its mission and maintaining a structure that avoids profit distribution. This compliance guarantees the DAO remains in good standing with Estonian authorities.

AML/KYC and Anti-Fraud Compliance

Given the decentralized nature of blockchain and cryptocurrency transactions, the Cathedral Foundation DAO takes proactive steps to prevent illicit activities such as money laundering and fraud. Estonia has strict anti-money laundering (AML) and know-your-customer (KYC) requirements, and the DAO follows these regulations diligently.

• Blockchain-Based KYC: The Cathedral Foundation DAO utilizes blockchain technology to ensure that all members and participants are verified while maintaining data privacy and security. This approach allows the DAO to balance regulatory compliance with the decentralized nature of its governance, ensuring that anonymity is preserved where appropriate, but security and compliance are upheld.

• Anti-Fraud Measures: The DAO has stringent mechanisms to monitor transactions and detect potential fraud, ensuring that funds are used exclusively for the DAO’s charitable purposes.

Cross-Border Compliance

As the Cathedral Foundation DAO expands and attracts international members and projects, it ensures compliance with the nonprofit regulations of other jurisdictions where it operates or raises funds. This includes adhering to international nonprofit standards, such as:

• OECD Guidelines for Nonprofit Organizations: The DAO ensures that funds are used strictly for charitable purposes and operates with full transparency and accountability, in line with OECD recommendations.

• International Sanctions and Financial Regulations: The DAO actively avoids transacting with sanctioned entities and complies with international financial regulations to prevent reputational and legal risks. This includes thorough checks and controls to ensure compliance with applicable sanctions and global financial requirements.

Transparency and Accountability

Transparency is a core value of the Cathedral Foundation DAO, and it remains fundamental to maintaining trust within the community and among external stakeholders. Compliance with transparency standards is maintained through several mechanisms:

• On-Chain Governance and Fund Allocation: All governance decisions, fund allocations, and project approvals are conducted on-chain using blockchain technology, ensuring that every action is transparent, auditable, and verifiable by the community.

• Audits and Financial Oversight: The DAO undergoes periodic audits by third-party organizations to verify its compliance with financial and legal regulations. These audits confirm that the DAO operates in alignment with its mission and that all funds are allocated effectively and ethically.

• Regular Reporting: The Cathedral Foundation DAO provides the community with regular reports on governance, financial activities, and project progress. These reports ensure full visibility into the operations of the DAO, fostering accountability and ensuring that all stakeholders can track how resources are used.

The Cathedral Foundation DAO is committed to adhering to the highest standards of legal compliance and regulatory adherence within Estonia’s nonprofit framework, as well as internationally recognized standards. By operating under Estonia’s supportive legal environment and maintaining rigorous compliance protocols, the DAO ensures that its activities remain transparent, accountable, and sustainable. Through proactive risk management, data protection, and robust financial oversight, the Cathedral Foundation DAO offers a secure and legally compliant environment for its members, projects, and supporters.