Wyoming’s governor signed a bill granting DAO legal status in the state.
A new bill granting decentralized autonomous organizations legal status in the cryptocurrency-friendly state has been signed into law in Wyoming.
The bill, called the Wyoming Decentralized Unincorporated Nonprofit Association Act, also known as DUNA. signed Gov. Mark Gordon signed the bill into law Thursday.
a16zcrypto general counsel Miles Jennings said the bill was a “significant breakthrough.” friday on X. The venture capital fund advised on the bill and testified before state Senate and House committees.
“Wyoming’s new law will allow blockchain projects to operate within the scope of the law without compromising decentralization,” Jennings posted on X.
DAO has drawn the ire of U.S. regulators over the past few years. The Commodity Futures Trading Commission won a case involving Ooki DAO last year after the group failed to respond. that much Referee Set a precedent that other DAOs can be held liable for legal violations as “persons” under the Commodity Exchange Act.
Wyoming’s bill would give DAOs a legal existence, allowing them to enter into contracts with third parties, open bank accounts, appear in court and pay taxes, Jennings said. post About the new law.
“We do all of this without disrupting the way DAOs are currently launched and operate. It protects decentralization and positions DAOs to effectively grow the ecosystem of the underlying blockchain network,” Jennings said.
Republican Sen. Cynthia Lummis, who has supported cryptocurrencies, said the bill would provide certainty to her state.
“I am excited to see this bill advance through the Wyoming Legislature,” Lummis said in a statement emailed to The Block. “This is a huge win by providing much-needed information not only to the cryptocurrency asset community, but to the entire state of Wyoming. “It brings certainty to web3 builders and boosts our state’s economy.”
What does securities law mean?
The Securities and Exchange Commission often calls the Howey test. It is based on a 1946 U.S. Supreme Court case that the SEC often cites to determine whether assets qualify as securities. According to the test, an asset has three components: money must be invested in an ordinary enterprise with a reasonable expectation that it will benefit from the efforts of others;
Jennings said DUNA supports the argument that Howey’s third component is not satisfied. In part, this is because DUNA is “an inherently decentralized entity” and has no management functions such as officers and directors.
“While the SEC’s theory of the applicability of U.S. securities laws to digital asset transactions is amorphous and constantly changing, the fact remains that it is bound by the Howey case law and subsequent case law. Pursuant to that case law, the adoption of DUNA will be used in DAO to strengthen the community’s argument against applying securities laws to the DAO’s digital assets,” Jennings said.
Updated at 4:45 PM ET to include comments from Senator Lummis.
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