Alabama Approves DUNA Act to Define DAO Operations Under State Law

Highlights:

• Alabama has granted decentralized autonomous organizations legal status under the DUNA Act.
• The act protects DAO members from personal liability and sets rules for governance using blockchain systems.
• US states like Alabama and Wyoming have created laws for DAOs as adoption grows.

Alabama has enacted the DUNA Act into law, which gives decentralized autonomous bodies legal status within the state. Governor Kay Ivey approved the bill after lawmakers passed it on March 17. The House voted 82–7, while 16 members abstained during the session.

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🚨BREAKING: ALABAMA LEGALIZES DAOs UNDER NEW DUNA FRAMEWORK

A major shift in U.S. crypto regulation as Alabama becomes the second state after Wyoming to formally recognize DAOs as legal entities under the DUNA Act, giving decentralized organizations real-world legal standing and… pic.twitter.com/K2XvjJASXN

— Astik Mondal (@Astik_Mondal_) April 2, 2026

Senator Lance Bell introduced Senate Bill 277 in February to address how DAOs operate under legal frameworks. The act categorizes DAOs as legal entities rather than unofficial online organizations. Alabama is now the second state to grant this status after Wyoming. Lawmakers designed the bill in such a way that it eliminates uncertainty among blockchain communities.

The law describes the way in which DAOs can be registered, operate, and sign contracts in Alabama. It addresses cases where decentralized groups could not sign contracts or hold assets legally. A large number of DAOs have existed unrecognized in the past despite conducting actual financial business. This framework has now subjected such operations to specific legal standards.

DUNA Act Sets Legal Structure and Protection for DAO Members

The DUNA Act allows DAOs in Alabama to act as full legal entities under state law. These organizations have the ability to own property, contract, and participate in legal matters. Institutions and businesses can now interact with DAOs via established contract frameworks. This modification allows DAOs to co-exist with conventional organizations in the same legal framework.

The law also protects individuals who participate in DAO governance. Members and administrators are not personally liable for the actions of the organization. This protection reduces financial risk for contributors involved in voting and management. It also promotes greater involvement in decentralized forms of governance.

A DAO should have a minimum of 100 members to be eligible, provided the members are working towards a nonprofit goal. These organizations often govern blockchain networks or manage smart contract systems. The legislation targets those groups that do not distribute profits but instead work in a collective manner. This is necessary to guarantee that only organized and intentional DAOs enjoy legal status. Meanwhile, Vitalik Buterin has called for a reform in the token-voting system of decentralized autonomous organizations.

We need more DAOs – but different and better DAOs.

The original drive to build Ethereum was heavily inspired by decentralized autonomous organizations: systems of code and rules that lived on decentralized networks that could manage resources and direct activity, more…

— vitalik.eth (@VitalikButerin) January 19, 2026

More States Move Toward DAO Laws While Global Adoption Expands

West Virginia has passed a similar DUNA bill, and the proposal now awaits the governor’s signature. Representative Tristan Leavitt introduced House Bill 5060 in February, and the House approved it on March 4. The bill allows DAOs to register as legal entities, enter into contracts, and operate within state law. It also outlines liability protections and governance requirements for qualifying organizations.

Earlier, Wyoming approved its DUNA Act and recognized DAOs under state law. Wyoming also approved the first legally recognized DAO in the United States. These steps positioned the state as an early leader in blockchain regulation. Other states are following suit to put clear structures in place.

The majority of DAOs run on Ethereum and layer-2 networks. These systems facilitate governance, voting, and decision implementation. States are introducing laws to define how these organizations operate within legal systems.

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