Utah’s DAO Act: A Bold Step Towards a Decentralized Future

Wyoming has pass The new law, called the “Utah Decentralized Autonomous Organizations” Act of March 1, 2023 (the “Utah DAO Act”), recognizes the limited legality and responsibility of DAOs (Decentralized Autonomous Organizations). The bill was unanimously passed by the Utah House of Representatives and Senate.


The Utah Legislature’s Blockchain and Digital Innovation Task Force led the effort. The bill was developed under the leadership of Senate Co-Chairman Kirk Cullimore and Representative Jordan Teuscher. The state has made DAOs a top priority, and the legislation reflects Utah’s status as a rapidly growing tech hub. The Utah DAO Act aims to provide DAOs with their own unique legal recognition, aligning technology input capabilities, DAO protocol quality assurance requirements, and diverse tax treatment with DAOs’ existing capabilities.

There are a number of issues that need to be addressed before this bill passes, including the possibility of a DAO base being completely anonymous, a mismatch between the initial tax language and state and federal tax realities, and no time to onboard new people to the project to ensure the Utah corporate division is ready to handle it new application. To address these concerns, the bill was amended and compromises were made on accountability issues, tax language and the timing of entry.

The Utah Department of Commerce, which oversees the Division of Corporate Affairs and the Division of Securities, will play an important role in the implementation and passage of the new law and cooperate in the dissemination of the Utah DAO Act.

The Task Force will continue to work with the Utah Department of Commerce through 2024 to ensure effective implementation of the new Utah DAO Act. The task force will also spend the remainder of 2023 exploring any weaknesses in the law and finding solutions, and preparing for administrative deployment. They will look for opportunities to develop and eventually pass additional DAO legislation.

Despite the passage of the Utah DAO Act, challenges remain in the current environment, including federal and judicial hurdles related to DAOs. The Utah Task Force realizes that there is no going back and that the best technology is being built in a shared decentralized environment. Many hope that other sovereign states will follow Utah’s lead and pass legislation promoting the movement.

In conclusion, the Utah DAO Act represents an important step forward in the recognition and regulation of DAOs and will provide opportunities for innovation and growth in the state’s technology, financial, and legal industries.

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