Crypto investment powerhouse Andreessen Horowitz (a16z) has referred to Wyoming as a “oasis” due to the state’s establishment of a new legal framework for in-state decentralized autonomous organizations (DAO) NGOs.
A bill that was signed into state law by Governor Mark Gordon expands the laws already in place for DAOs in Wyoming, where they were previously permitted to form as limited liability companies.DAOs can now legally identify as nonprofit associations without incorporation.
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.
According to A16z, it will steer the DAOs it is connected to in this direction legally and restrict its further DAO investments to organizations that follow this course of action.
Wyoming has been particularly welcoming to cryptocurrency firms among US states, setting the standard for licensing initiatives.Sen. Cynthia Lummis (R-Wyo.) has also worked to federally regulate cryptocurrency, as evidenced by a bill she introduced this week that would establish guidelines for stablecoin issuers.Federal regulators, such as the U.S. Commodity Futures Trading Commission, have targeted DAOs, as demonstrated in the case against Ooki DAO, even though they have specific objectives for enforcement actions to target.