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Alabama has become the second US state to legally recognise decentralised autonomous organisations, signing the DUNA Act into law after an 82-7 Senate vote, giving DAOs the ability to own property, sign contracts, and shield members from personal liability for the first time under state law.
The DUNA Act is designed to address one of the crypto industry’s biggest challenges—legal ambiguity.
With over 13,000 DAOs globally managing approximately $24.5 billion in assets, according to CoinLaw data, the lack of legal clarity has long hindered growth and institutional participation.
By recognizing DAOs as legal entities, the DUNA-Act allows these blockchain-based organizations to operate within established legal systems.
This includes the ability to own property, enter contracts, and even initiate or face lawsuits—capabilities previously restricted due to unclear legal standing.
Miles Jennings, head of policy and general counsel at Andreessen Horowitz, emphasized the significance of the development in a post on X.
“Decentralized governance is essential to crypto’s future—it’s one of the core constructs in market structure legislation,” Jennings stated.
The DUNA Act goes beyond recognition—it actively empowers blockchain communities.
Under the new law, DAOs must meet specific requirements to qualify, including maintaining at least 100 members and operating for a shared nonprofit purpose, such as managing blockchain networks or smart contract ecosystems.
Once qualified, these DAOs gain full legal entity status, a game-changing provision that enables real-world scalability.
Governance processes such as voting, proposals, and consensus mechanisms can remain on-chain, preserving decentralization while complying with legal standards.
Jennings further highlighted the impact of the DUNA Act:
“This gives decentralized communities the certainty to build, govern, contract, and scale in the real world.”
Crucially, the DUNA Act also shields individual members from personal liability, ensuring that participants are not personally responsible for disputes arising from DAO activities—a major step toward mainstream adoption.
Alabama’s adoption of the DUNA Act underscores a growing trend among U.S. states racing to attract blockchain innovation.
Wyoming pioneered this movement in 2024 by becoming the first state to recognize DAOs under the DUNA-Act, setting a precedent for others to follow.
Now, West Virginia is moving in a similar direction. A comparable DUNA-Act bill introduced by Representative Tristan Leavitt is currently awaiting the governor’s signature, signaling that momentum is building nationwide.
This state-level push comes as federal lawmakers continue to debate broader crypto market structure legislation. Jennings noted that domestic legal frameworks like the DUNA-Act are critical in the interim:
“As federal crypto market structure legislation moves closer to becoming law, builders need effective domestic legal structures.”
The broader implications of the DUNA Act are hard to ignore. By bridging the gap between decentralized governance and traditional legal systems, the law could unlock new opportunities for institutional investment, innovation, and global competitiveness.
For crypto builders, the DUNA Act represents more than regulation—it’s validation.
It signals that decentralized governance models are no longer fringe concepts but essential components of the evolving financial ecosystem.
As more jurisdictions adopt similar frameworks, the DUNA-Act could become a blueprint for global DAO regulation, shaping how decentralized organizations operate for years to come.
The DUNA Act marks a powerful and potentially transformative moment for the crypto industry.
Alabama’s move not only legitimizes DAOs but also sets the stage for broader adoption across the United States and beyond.
With legal clarity, liability protection, and operational flexibility now within reach, the DUNA-Act could be the catalyst that propels decentralized governance into the mainstream.
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