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In Alabama, decentralized autonomous organizations will be granted legal entity status., 2026/04/02 15:13:47
Alabama Governor Kay Ivey has signed a bill that grants decentralized autonomous organizations (DAOs) legal recognition.
The legislation was introduced by local Republican Senator Lance Bell. On March 17, the bill was approved with 82 votes in favor, 7 against, and 16 abstentions. The law is set to take effect on October 1.
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The bill provides DAOs with a status similar to that of limited liability companies (LLCs). Operating on blockchain technology and utilizing smart contracts for voting and proposals, DAOs will have the ability to own property, enter into contracts, and act as plaintiffs or defendants in legal proceedings, while participants in these organizations may be shielded from personal liability regarding disputes arising from DAO activities.
A decentralized unincorporated nonprofit association (DUNA) must consist of at least 100 members who have joined by mutual agreement. This organization can own property and engage in commercial activities, but it is prohibited from distributing any profits among its members.
Alabama becomes the second U.S. state to grant legal status to DAOs, following Wyoming, which enacted legislation expanding the powers of decentralized autonomous organizations in 2024. Recently, a similar bill was introduced by Republican Tristan Leavitt in the West Virginia House of Delegates. This bill is awaiting the governor’s signature in that state.
Previously, the Northern District Court of California ruled that the legal status of a decentralized autonomous organization does not protect Lido DAO from lawsuits for violations of securities laws.
