Unlocking the Future: Wyoming’s Game-Changing Ruling for DAOs

Wyoming has extended its legal framework for DAOs even further, setting up a new nonprofit status. A16z says it’ll encourage the DAOs it’s associated with to establish themselves in that state. 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. 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. This is a major breakthrough for DAOs, providing them with much-needed protections and empowering them to keep their blockchain networks open.

“The DUNA solves three key challenges faced by DAOs,” writes Jennings, “by giving them legal existence to contract with third parties and appear in court, enabling them to pay taxes, and providing them with limited liability from the actions of other members.” This is an important step for DAOs, allowing them to operate with legal recognition and protections.

In light of this development, a16z has announced that it will direct the DAOs it is associated with towards this new legal status. Furthermore, they have stated that they will limit future investments in DAOs to entities that pursue this legal path. This demonstrates a strong commitment to the success and growth of DAOs in Wyoming.

Wyoming has been a leader in creating a friendly environment for crypto businesses and innovation, through initiatives such as its licensing regulations. Recently, Sen. Cynthia Lummis (R-Wyo.) has even proposed federal regulation for cryptocurrency, including rules for stablecoin issuers.

However, despite the state’s efforts to create a welcoming environment for the industry, federal regulators like the U.S. Commodity Futures Trading Commission have still pursued legal action against DAOs, as seen in the case against Ooki DAO.

The recognition of DUNAs in Wyoming is a significant step forward for the DAO community, providing them with the legal protections and recognition they need to thrive. Wyoming’s commitment to supporting blockchain technology and innovation continues to make it an ideal location for crypto businesses and organizations. As the industry continues to grow and evolve, the state’s proactive approach towards regulation and legal frameworks will undoubtedly benefit both DAOs and crypto businesses in general.