Wyoming has emerged as a trailblazer in blockchain legislation once again, with Governor Mark Gordon signing the Decentralized Unincorporated Nonprofit Association Act into law. This groundbreaking legislation, set to take effect on July 1, 2024, establishes a legal framework for decentralized autonomous organizations (DAOs) seeking nonprofit status.
Legislative Milestone
The Decentralized Unincorporated Nonprofit Association Act represents a significant milestone in Wyoming's commitment to fostering innovation and regulatory clarity in the cryptocurrency and blockchain space. The bill, which garnered bipartisan support, passed with resounding approval in both the House and Senate, signaling widespread recognition of the importance of accommodating emerging technologies within the state's legal framework.
Under the new law, DAOs comprising at least 100 members will have the opportunity to formalize their operations as unincorporated nonprofit associations. This designation allows DAOs to engage in profit-making activities while directing all proceeds toward advancing their nonprofit objectives. Furthermore, DAOs registered under this framework gain the flexibility to acquire and transfer property, including tokens, without compromising their decentralized nature.
Industry Endorsement
Miles Jennings, general counsel at a16z crypto, leaded Wyoming's progressive approach, emphasizing the law's significance in enabling blockchain projects to operate within regulatory boundaries while preserving decentralization. By providing a clear legal framework, Wyoming empowers DAOs to navigate legal complexities without sacrificing their innovative spirit.
Building on Previous Legislation
Wyoming's journey toward blockchain-friendly legislation began in 2021 with the passage of the Wyoming Decentralized Autonomous Organization Supplement Act, which laid the groundwork for DAOs to operate within the state's LLC laws. Subsequent amendments in 2022 further clarified regulatory ambiguities, ensuring that DAOs could thrive within Wyoming's legal framework.
Preston Byrne, partner at Brown Rudnick, praised Wyoming's latest legislative efforts, highlighting the significant improvements over previous laws. Byrne noted that the Decentralized Unincorporated Nonprofit Association Act addresses key concerns and introduces innovative concepts tailored to the needs of crypto-native entities.
Navigating the Future of DAOs
As Wyoming continues to spearhead blockchain legislation, the state solidifies its position as a hub for innovation and technological advancement. By embracing DAOs and providing a supportive regulatory environment, Wyoming sets a precedent for other jurisdictions seeking to foster innovation in web3.
