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Alabama Becomes the Second U.S. State to Grant Legal Status to DAOs
On April 2, Cointelegraph reported that Alabama Governor signed the Decentralized Non-Profit Association Act, making Alabama the second state to grant legal status to DAOs after Wyoming. The legislation provides legal recognition and limited liability protection for DAOs, allowing them to possess full corporate entity status, own property, sue and be sued, and enter into contracts, while individual members and managers are shielded from personal liability. To qualify, a DAO must have at least 100 members and be formed for a common non-profit purpose, such as governing a blockchain network or smart contract system. A16z Crypto’s policy director stated that decentralized governance is central to the future of crypto, and this legislation offers certainty for decentralized communities to build, govern, and scale in the real world. A similar bill has passed the West Virginia House and is awaiting the governor’s signature.