- 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. 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.
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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.
