Today, Wyoming lawmakers took that one step closer to put a new law in place. This law is of extreme importance to the crypto world’s DeFi space, as it would allow Decentralized Autonomous Organizations (DAOs) the ability to gain company status within the state.
DAO’s Might Gain LLC Status
Bill 38 saw its approval at the Wyoming Legislature’s Corporations, Elections, and Political Subdivisions Meeting.
🚨 DAOs took a HUGE step forward today 🚨
The Wyoming DAO bill passed the Wyoming Senate committee. I’ll try to keep folks posted on what happens next.
This bill is significant — short thread why 👇 https://t.co/RLrRUNAL2A
— Aaron Wright (@awrigh01) March 9, 2021
The bill itself was introduced back in January of this year, through the first Committee Hearing, and primarily aims to allow DAOs to be recognized by state authorities as a legitimate company. Through doing so, DAOs will be capable of forming Limited Liability Companies, or LLCs
Matt Kaufman stands as a partner and attorney for Hathaway & Kunz, and warned that the bill itself still had a long way to go, even if he was very much pleased with the development. Of course, all he had for Wyoming’s legislature was praise for how it was adapting to the rapidly-evolving crypto space, as well as devising new strategies to innovate on it itself.
Still A Lot Of Push Back For Crypto DAOs
As for DAOs themselves, the fundamentals behind them stand in line with the decentralized nature of cryptocurrencies in general: There is no centralized leader for these organizations.
Instead of that, the control is evenly spread across the various members of that DAO’s team. This bill promises various crypto startups a significant increase in legitimacy, which the crypto space sorely needs.
Of course, no one can just have something good and have other people enjoy it with them: Preston Byrne stands as a partner at Anderson Kill Law, and is very much against it. He took his opinions to Twitter, declaring those that use “DAO” to be only token hawkers.
Wyoming: scrap this bill. “DAO” is language long used by token hawkers to justify selling shitcoins and half baked code. They don’t incorporate an LLC because they don’t want to KYC their members and be responsible for what the DAOs do. Don’t enable this behavior. https://t.co/3HeUI49Vhx
— Preston Byrne (@prestonjbyrne) February 5, 2021
He warned it will only serve to justify the sale of “shitcoins”, a common slur in the crypto space for coins that are either pathetically low in value or are doomed to fail in general.
Quality Is King
A lot of these kinds of fears were indirectly answered by Kaufman in his interview with the press. He hammered home that the DAOs applying for LLC status will have to jump through some significant hoops in order to pull it off.
He justified this by citing the innumerably large amount of smart contracts and entities that have failed throughout the years because the people behind it couldn’t maintain it. He hammered home that no one really wants those types of groups as a registered company, assuring the public that the bar for acceptance will be very high.
It seems that Wyoming is making a very hard push to become a veritable hotbed of crypto within the US at large. With luck, this will work out to the benefit of all crypto businesses in the US, as well as the state itself. The future holds many possibilities, and “Blockchain Valley” situated in Wyoming might just be one of them.