Alabama Gives DAOs a Legal Path Under New Law

Alabama has become the second U.S. state to approve a DUNA framework for decentralized autonomous organizations, or DAOs. The measure, Senate Bill 277, creates a legal structure for what the law calls decentralized unincorporated nonprofit associations. Legislative records show the bill was introduced by Sen. Lance Bell, passed both chambers, and reached the governor in March.

The law matters because it gives qualifying blockchain based groups a clearer legal identity. Under the bill text, a DUNA can exist as an entity separate from its members. It can hold property, enter contracts, and take part in legal proceedings. At the same time, members are not personally liable for the group’s obligations only because they are members, managers, or administrators.

Still, the Alabama framework is narrow. It applies to nonprofit purpose organizations, not every DAO. The bill says a qualifying decentralized association must have at least 100 members and must operate for a common nonprofit purpose. The text also allows these groups to use smart contracts and distributed ledger tools for governance and operations.

What the Alabama DAO law changes next

The measure also sets practical rules for how a DUNA can function in the real world. For example, it outlines how a group may record authority over real property and how it may appoint an agent for service of process through the secretary of state. That means the law is not only symbolic. It creates a legal route for decentralized groups to act more like recognized organizations offline.

One detail is important for timing. Although Alabama has approved the law, the framework does not take effect right away. The enrolled bill says the act will become effective on Oct. 1, 2026. So the state has adopted the structure, but DAOs still have to wait months before the new system is in force.

Alabama follows Wyoming, which passed its own DUNA law in March 2024 with an effective date of July 1, 2024. That makes Alabama the second state to adopt this specific model, while Wyoming remains the first. The move adds to a broader effort in some states to give DAOs a clearer legal wrapper without forcing them into a standard corporate form.