Alabama establishes legal identity, liability protection and tax framework for DAOs amid judicial reform bill

Alabama has become the second U.S. state to grant decentralized autonomous organizations (DAOs) formal legal recognition, with Governor Kay Ivey signing the Alabama DUNA Act (Senate Bill 277) on April 1, 2026. The DUNA Act, introduced in February by Republican Senator Lance Bell, provides DAOs with defined legal personality and addresses how they operate in the real world ^{[1] [2]}.

The statute gives DAOs full legal personality, shields individual participants from personal liability, and establishes a clearer path to tax compliance. The law also limits profit distributions to members, a measure noted in coverage of the bill. Observers point to the scale of DAO activity — global DAO treasuries are estimated at about $24.5 billion across roughly 6.5 million token holders — as context for the change ^{[1] [3]}.

Alabama’s DAO statute is part of a broader legislative package that includes judicial reforms; implementation of the DAO law is scheduled to take full effect on October 1, 2026, and the package removes certain automatic deference to administrative agencies in state courts ^{[4] [5]}.

The DUNA Act places Alabama alongside Wyoming as a U.S. state recognizing DAOs in law and may influence similar proposals in other states, where related bills are under consideration ^[3].