Alabama becomes second US state to grant DAOs legal status under DUNA

The legislation “embraces innovation, protects participants and empowers internet-native communities to compete with big tech incumbents,” said a16z’s Miles Jennings.

The US state of Alabama has become the second US jurisdiction after Wyoming to grant decentralized autonomous organizations (DAOs) legal status under the DUNA Act.

The Decentralized Unincorporated Nonprofit Association (DUNA) Act (Senate Bill 277) was introduced in February by Republican Senator Lance Bell. The House passed it 82-7 with 16 abstentions on March 17, and has now been signed by Alabama Governor Kay Ivey, according to a16z Crypto.

Speaking about the bill’s passage, a16z Crypto’s head of policy and general counsel, Miles Jennings, said on Wednesday that “decentralized governance is essential to crypto’s future — it’s one of the core constructs in market structure legislation.”

The bill provides legal status and limited liability protections to DAOs, solving a long-unresolved question in crypto: How DAOs exist from a legal standpoint in the real world. 

It gives decentralized communities “the certainty to build, govern, contract, and scale in the real world,” added Jennings. 

To qualify, a DAO must have at least 100 members joined for a common nonprofit purpose, such as governing a blockchain network or smart contract system.

Governance can operate entirely through blockchain technology and smart contracts, and voting, proposals and consensus mechanisms can all be stored onchain.

These organizations will have full legal entity status, they can own property, sue and be sued, and enter into contracts, while individual members and administrators will be shielded from personal liability. 

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“As federal crypto market structure legislation moves closer to becoming law, builders need effective domestic legal structures,” added Jennings. 

A similar DUNA bill (HB 5060), introduced by Representative Tristan Leavitt in February, passed the House on March 4 and is awaiting the governor’s signature in West Virginia. 

Wyoming’s DUNA Act was signed into law by Governor Mark Gordon in March 2024. The state approved the first legally recognized DAO in the United States in July 2021. 

Over 13,000 DAOs exist worldwide with collective treasury assets under DAO control surpassing $24.5 billion as of 2025, according to CoinLaw. The average DAO treasury size is around $1.2 million, and Ethereum and its layer-2 networks host over 85% of DAOs, reported PatentPC in March.

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Source: CoinTelegraph