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Wyoming’s new DUNA law allows DAOs to gain legal entity status starting July 1, 2024, as federal courts increasingly reject claims that DAOs are just software.
Wyoming Governor Mark Gordon signed legislation on March 7, 2024, creating a new legal framework that allows Decentralized Autonomous Organizations (DAOs) to register as "decentralized unincorporated nonprofit associations" (DUNAs) starting July 1, 2024 [1]. This move provides a formal legal structure for decentralized groups, contrasting with recent federal court rulings that have increasingly classified DAOs as general partnerships subject to traditional liability and securities regulations [2].
| At a glance | |
|---|---|
| New Law Effective Date | July 1, 2024 |
| Minimum DUNA Membership | 100 members |
| Federal Court Ruling | Lido DAO classified as general partnership |
| Primary Regulatory Risk | Unregistered securities litigation |
The Wyoming Decentralized Unincorporated Nonprofit Association Act aims to resolve the long-standing struggle of DAOs to fit into traditional legal frameworks [1]. By registering as a DUNA, these organizations gain the ability to enter contracts, hold property, open bank accounts, and appear in court while providing members with a liability shield against the actions of the association [1]. To qualify, a DAO must maintain at least 100 members [1]. While the law permits profit-making activities, it prohibits the distribution of dividends or profits to members, requiring that proceeds be directed toward the organization's nonprofit purpose [1].
This legislative effort represents a significant evolution from Wyoming’s 2021 DAO Supplement Act, which previously attempted to integrate DAOs into state LLC laws [1]. Proponents, including prominent investment firms, suggest the DUNA structure could become an industry standard for web3 organizations seeking to operate within legal bounds [1].
While Wyoming seeks to provide a path for legal recognition, federal courts are simultaneously narrowing the scope for DAOs to claim immunity from existing laws. In a recent class-action lawsuit, a federal judge rejected the argument that the Lido DAO is merely "software" and therefore exempt from legal liability [2]. Judge Vince Chhabria ruled that Lido functions as a "general partnership" under California law, exposing its institutional investors—including firms like Andreessen Horowitz and Paradigm Operations—to potential liability as partners [2].
This judicial stance aligns with the SEC’s long-standing position that DAOs are not exempt from federal securities registration requirements simply by virtue of their decentralized structure [1]. The Commodity Futures Trading Commission (CFTC) has also successfully argued in court that a DAO can be classified as a "person" or unincorporated association, a designation that typically precludes limited liability for members [1]. These rulings suggest that even as states create new legal wrappers, DAOs remain subject to federal scrutiny regarding whether their tokens constitute investment contracts under the Howey test [1].
The tension between state-level efforts to provide legal clarity and federal efforts to enforce existing securities and liability laws remains the central friction point for the industry. Whether the DUNA structure will successfully insulate participants from federal liability or merely provide a clearer target for regulators remains an open question.
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 2 outlets · Sep 12, 2026 · How we report
A Dao Crypto organization, or decentralized autonomous organization, is a system governed by smart contracts and token holders rather than a centralized entity. As of 2024, these organizations use blockchain technology to manage assets, such as the stablecoin DAI, or to coordinate community governance and decision-making.
MakerDAO manages the value of the DAI stablecoin by utilizing smart contracts to control the supply through an overcollateralized loan process. By adjusting collateralization ratios and interest rates, the organization maintains the stablecoin's peg to the US dollar.
A Dao Crypto organization can remove leadership or staff through community voting processes, as seen when the Ethereum Name Service community voted to remove a director of operations. These organizations function through decentralized governance where token holders or community delegates make decisions regarding the entity's personnel and operations.