Wyoming Grants DAOs New Legal Structure

Wyoming
has
established

a
new
legal
framework
for
in-state
decentralized
autonomous
organization
(DAO)
nonprofits
that
has
crypto
investment
giant
Andreessen
Horowitz
(a16z)
calling
the
state
an
“oasis.”

Gov.
Mark
Gordon

signed
a
bill
into
state
law
that
adds
to
Wyoming’s
growing
codes
for
DAOs,
which
were

already
cleared
to
establish
themselves
as
limited-liability
corporations
there.
Now
DAOs
can
also
secure
themselves
as
unincorporated
nonprofit
associations.

Miles
Jennings,
general
counsel
at
a16z
Crypto,
called
it
a
“major
breakthrough”
that
will
give
the
groups
“much-needed
protections
and
empower
them
to
keep
blockchain
networks
open,”
according
to

a
blog
entry
posted
Friday.
This
new
recognition
as
“decentralized
unincorporated
nonprofit
associations”
(DUNAs)
will
help
the
blockchain
stewards
ensure
“that
the
network
remains
open,
that
it
does
not
discriminate
and
that
it
does
not
unfairly
extract
value,”
Jennings
contends.

“The
DUNA
helps
DAOs
accomplish
this
by
solving
three
of
the
key
challenges
they
face
–
it
gives
them
legal
existence,
enabling
them
to
contract
with
third
parties
and
appear
in
court;
it
enables
them
to
pay
taxes;
and
it
provides
them
with
limited
liability
from
the
actions
of
other
members,”
Jennings
and
David
Kerr
wrote
on
the
company’s
website.

A16z
indicated
it’ll
direct
the
DAOs
it’s
associated
with
toward
this
legal
status
and
will
limit
its
future
DAO
investments
toward
entities
pursuing
this
legal
path.

Among
U.S.
states,
Wyoming
has
been
especially
friendly
to
crypto
businesses,
leading
the
way
in
its
licensing
initiatives.
And
its
Sen.
Cynthia
Lummis
(R-Wyo.)
has
sought
to
regulate
crypto
at
the
federal
level,
including
in
a
bill
this
week
that
would
set
up
rules
for
stablecoin
issuers.

Despite
having
clear
targets
for
enforcement
actions
to
focus
on,
federal
regulators
including
the
U.S.
Commodity
Futures
Trading
Commission
have
gone
after
DAOs,
such
as
in

the
case
against
Ooki
DAO.