Marshall Islands Advances Legislation for Decentralized Autonomous Organizations

According to CoinDesk, the Marshall Islands has taken a significant step towards becoming a global hub for the incorporation of decentralized autonomous organizations (DAOs). Last week, the island nation's parliament passed legislation that strengthens a previous law recognizing DAOs as legal entities. The amended Decentralized Autonomous Organization Act of 2023 is considered the 'most comprehensive law for DAOs globally' and is expected to serve as a blueprint for the rest of the world in regulating DAOs, according to Adam Miller, CEO & Co-Founder of MIDAO, and Member of Parliament David Paul.In February 2022, the Marshall Islands became the first nation to recognize DAOs as legal entities. Since 2021, under the previous act, the country has incorporated nearly 100 DAOs. The amended law provides a faster registration time, a maximum of 30 days instead of 30-60 days, and states that DAOs will not be held responsible for the use of open-source software they created. Additionally, most governance tokens are explicitly not securities if they do not confer any economic rights, which is different from possible financial gain.The Marshall Islands is also the first to bring into law Series DAO LLCs, allowing sub-DAOs to have separate assets and liabilities. The nation is not subject to U.S. federal laws but still has access to the U.S. Postal Services, Federal Aviation Administration, and the U.S. Military. To open a DAO in the Marshall Islands, one needs to visit MIDAO.org and hire MIDAO as a registered agent to complete the process. DAOs or the specified member of the DAO would not need to open a local office or hire a local law firm.