The Gospel of DAO? Ohio Legislation Certifies DAO as a Legal Entity, a16z: It Will Serve as a Future Investment Criterion.
Wyoming Establishes New Legal Framework for DAOs, a16z Looks Favorably on the Development
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Legislation in Wyoming, DAOs Becoming Legal Entities
a16z Crypto: A Major Breakthrough, Voters No Longer Bound
The Biggest Challenge: Convincing DAOs to Adopt the New Structure
Legislation in Wyoming, DAOs Becoming Legal Entities
According to a report by Fortune magazine, Wyoming Governor Mark Gordon has signed the state law “Decentralized Unincorporated Nonprofit Association Act” to further regulate the growing scale of DAOs in the state.
DAOs can now operate as unincorporated nonprofit associations and the law will come into effect on July 1, 2024.
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Note: The law is known as the Decentralized Unincorporated Nonprofit Association Act (DUNA).
a16z Crypto: A Major Breakthrough, Voters No Longer Bound
Miles Jennings, General Counsel for a16z Crypto, wrote that the law provides much-needed protection for DAOs and enables them to remain open to blockchain networks.
It primarily addresses three major issues:
Granting legitimacy to DAOs
Imposing tax obligations on DAOs
Providing limited liability protection for members (exempting them from legal liabilities arising from the actions of other members)
Miles Jennings mentioned:
The purpose is not to create profits for DAOs (although DAOs can generate income and distribute it to members), and if a DAO violates the law, this structure will not prevent regulatory enforcement. On the contrary, it allows DAOs to hire legal counsel and appear in court. This also means that DAO voters are not necessarily responsible for the actions of the DAO, just like Enron shareholders are not liable for the company’s fraud.
The Biggest Challenge: Convincing DAOs to Adopt the New Structure
Miles Jennings stated that currently, this structure will try to circumvent the thorny issue of whether cryptocurrencies are classified as securities. He believes that DAOs, without directors or managers and without a mission to maximize profits, should not be classified as securities.
However, he also admitted that this structure may still not escape the attention of the SEC.
He pointed out that the biggest challenge at the moment is convincing existing DAOs to adopt the new structure:
a16z Crypto plans to collaborate with projects it has invested in and make it a condition for future investments (adopting the new DAO structure).
Chain News’ First Reader Gathering Ramble Bar | What You Need to Know about the Cancun Upgrade:
Chain News’ physical event “Ramble Bar” invites the core organizing team of ETHTaipei 2024, Martinet and Anton, to chat with readers about the future impact of the Cancun upgrade on Ethereum and Layer 2. There is also a chance to win free tickets to ETHTaipei.
Readers are welcome to come with questions to the offline gathering on 3/14 (Thursday)!
Registration link:
https://abmd.pse.is/5nz688
a16z Crypto
DAO
Miles Jennings
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Further Reading
“DAO Governance” Struggles to Support Technical Decisions, Gitcoin Announces Restructuring and the Establishment of an Experiment Lab
Vitalik Buterin, Founder of Ethereum, Article: The Prospects and Challenges of Integrating AI and Blockchain
