Alabama Grants Legal Status to DAOs with New Legislation

Alabama has become the second U.S. state to grant legal status to Decentralized Autonomous Organizations (DAOs), following Wyoming. According to BlockBeats, the state's governor signed the Decentralized Non-Registered Nonprofit Association Act on April 2, providing DAOs with legal recognition and limited liability protection. This legislation allows DAOs to function as full legal entities, enabling them to own property, engage in legal proceedings, and enter contracts, while protecting individual members and managers from personal liability. To qualify, a DAO must have at least 100 members and be formed for a common nonprofit purpose, such as governing blockchain networks or smart contract systems. The head of policy at a16z Crypto emphasized that decentralized governance is central to the future of cryptocurrency, and this law offers decentralized communities the certainty needed to build, govern, and expand in the real world. A similar bill in West Virginia has passed the House and is awaiting the governor's signature.