Authorities in the U.S. state of Alabama officially granted decentralized autonomous organizations (DAO) legal status as decentralized unincorporated nonprofit associations (DUNA).
The Alabama State Legislature passed bill SB277, which recognizes DAOs as legal entities and introduces a limited liability mechanism for their participants. The bill was also signed into law by Governor Kay Ivey.
The bill was introduced by Senator Lance Bell in February 2026 and approved by the House of Representatives. The initiative addresses one of the industry’s key legal uncertainties — the lack of a clear legal status for DAOs within the traditional legal system.
Under the law, DAOs must meet established requirements, including having at least 100 members. All participants must be united by a common nonprofit purpose, after which the organization is granted full legal status as a decentralized unincorporated nonprofit association (DUNA). This status allows such organizations to own assets, enter into contracts, and act as plaintiffs or defendants in court. At the same time, participants and administrators are exempt from personal financial liability.
DAO governance may be carried out entirely through blockchain networks and smart contracts, including voting processes, proposal submissions, and consensus-building. The law is designed to support online communities working with decentralized technologies and to create a competitive environment for them relative to traditional technology corporations.
Alabama is the second U.S. state to establish such a legal framework. A similar law was passed in Wyoming in 2024. Meanwhile, a comparable bill is being considered in West Virginia, where it already passed the House of Representatives and is awaiting the governor’s signature.
Legal aspects of DAOs are being clarified by authorities in the UAE, which in 2025 developed a new legal framework for decentralized autonomous organizations, allowing international crypto companies to operate legally in the region without a physical presence. Moreover, in 2022, the Digital Agency of Japan established its own DAO to explore the possibility of granting legal status to decentralized organizations.
