Alabama Enacts DUNA Act, Becoming Second US State to Grant DAOs Legal Status

Alabama Governor Kay Ivey signed the Alabama DUNA Act (Senate Bill 277) into law on April 1, 2026, making Alabama the second US state after Wyoming to grant decentralized autonomous organizations formal legal recognition. The legislation, which passed the Alabama House 82-7 on March 17, provides DAOs with full legal personality, liability protection, and operational capabilities including property ownership, contract execution, and banking access. The nonprofit-focused framework requires DAOs to have at least 100 members united around purposes like governing blockchain networks, while shielding individual members from personal liability—a critical protection following the 2024 Ooki DAO case where participants faced personal liability for CFTC violations. With global DAO treasuries holding an estimated $24.5 billion across 6.5 million token holders, major protocols like Lido are anticipated to register as DUNAs in Q2 2026, while Tennessee and New Hampshire consider similar legislation.

Alabama's DUNA Act Legal Framework for DAOs

• ▪Alabama Governor Kay Ivey signed the Alabama DUNA Act (Senate Bill 277) into law on April 1, 2026
• ▪The Alabama DUNA Act is explicitly nonprofit-focused, meaning DAOs cannot distribute dividends in the traditional corporate sense
• ▪Under the Alabama DUNA Act framework, qualifying DAOs can own property, enter into contracts, open bank accounts, and sue or be sued as independent entities
• ▪The Alabama DUNA Act grants DAOs full legal personality, liability protection, and a clear path to tax compliance
• ▪The Alabama House passed Senate Bill 277 by an 82-7 vote with 16 abstentions on March 17

Liability Protection and Qualification Requirements

• ▪In the 2024 Ooki DAO case, a federal court held DAO participants personally liable for CFTC violations
• ▪To qualify under the Alabama DUNA Act, a DAO must have at least 100 members united around a common nonprofit purpose
• ▪Global DAO treasuries hold an estimated $24.5 billion in assets across 6.5 million token holders

Comparison with Wyoming's DAO Law and Broader Regulatory Context

• ▪Miles Jennings called the Alabama DUNA Act passage a landmark moment on April 1, 2026
• ▪Wyoming pioneered DAO legal status in July 2021 with its DAO LLC law
• ▪Miles Jennings stated that decentralized governance is essential to crypto's future and is one of the core constructs in market structure legislation
• ▪Potential DUNA registrations by major protocols like Lido are anticipated in Q2 2026
• ▪Miles Jennings is head of policy and general counsel at a16z crypto

Perspective of Miles Jennings and a16z crypto

• ▪Miles Jennings views decentralized governance as essential to cryptocurrency's future and a core construct in market structure legislation
• ▪a16z crypto considers the Alabama DUNA Act passage a landmark moment for decentralized autonomous organizations

Perspective of DAO operators and protocol developers

• ▪Major protocols like Lido are considering DUNA registration in Alabama during Q2 2026
• ▪DAO operators view the Alabama DUNA Act as addressing personal liability concerns highlighted by the 2024 Ooki DAO federal court case

Perspective of State legislators in Tennessee and New Hampshire

• ▪State legislators view DAO legal frameworks as competitive tools to attract blockchain organizations and their $24.5 billion in treasury assets