Alabama Becomes Second State to Grant DAOs Legal Status

- Governor Kay Ivey signs DUNA Act into law. - DAOs gain full legal recognition and limited liability protections. On April 1, 2026, Governor Kay Ivey signed the Decentralized Unincorporated Nonprofit Association (DUNA) Act. This new law makes Alabama the second U.S. state to legally recognize decentralized autonomous organizations (DAOs). The milestone positions Alabama as a key player in advancing regulatory clarity for blockchain-based organizations. The DUNA Act, officially designated as Senate Bill 277, establishes a comprehensive legal framework for DAOs. These blockchain-based entities can now own property, enter into contracts, and file lawsuits under Alabama law. Additionally, DAO members benefit from limited liability protections, shielding individuals from personal accountability for organizational debts and legal actions. To qualify for recognition under the DUNA Act, DAOs must maintain a minimum of 100 members, operate as nonprofit organizations, and use blockchain technology and smart contracts for governance and operations. Alabama’s legislation follows Wyoming’s trailblazing approach. Wyoming became the first state in the U.S. to legally recognize DAOs when its law took effect on July 1, 2024. Both states have established similar thresholds for DAO membership and nonprofit criteria, setting benchmarks for legislative innovation in decentralized governance. This move by Alabama reflects the growing momentum at the state level to provide legal frameworks for emerging decentralized technologies. As other states contemplate similar measures, Alabama’s actions further legitimize the role of DAOs in shaping decentralized systems and secure their legal standing within the U.S. crypto landscape.