DAO’s could soon get legal standing under new California law
DAO's are a "newish" form of decentralised or "headless" organisation and California wants to profit and benefit from them so is introducing new legislation to approve and regulate them.
Key takeaways
- Jennings expressed his enthusiasm for California leading the way in this area, as the state has long been a high-tech leader.
- Bringing Haney’s fellow assembly up to speed is the first step to addressing the complex topic of DAOs, and blockchain technology.
- A crypto crackdown in the US was triggered by the collapse of FTX in November, led by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
Cite or link to this article
Griffin, M. (2023) 'DAO’s could soon get legal standing under new California law', 311 Institute, 30 April. Available at: https://www.311institute.com/daos-could-soon-get-legal-standing-under-new-california-law/ (Accessed: 1 October 2026).
A legal framework for Decentralized Autonomous Organizations (DAOs), a relatively new form of decentralised, or headless, company that runs on Web 3.0 technology, could finally be coming to California after San Francisco Assembly member Matt Haney introduced Assembly Bill 1229 on Monday, which already has support from prominent crypto investment firm Andreessen Horowitz and the Crypto Council for Innovation.
“We have long been supportive of reasonable regulation that puts guardrails in place while giving innovators the certainty they need to keep building, which is exactly what this legislation does,” Miles Jennings, General Counsel at a16z crypto, told reporterst. Jennings expressed his enthusiasm for California leading the way in this area, as the state has long been a high-tech leader.
The Future of Work, by keynote Matthew Griffin
Assembly Bill 1229 would change the state’s corporate code to include DAOs, blockchain networks, and smart contract protocols. If passed, the bill would enable DAOs to incorporate in California and pay taxes, while providing better protection for Californians participating in the Web 3.0 economy.
“We have to make sure that our laws are keeping up with technology,” said a spokesperson for Assembly member Haney. “For us, we’ve seen only three paths forward, environmental tech, biotech, and we think that Web 3.0 needs to be firmly rooted in California. And that’s what this bill is about.”
A DAO, such as Jack Dorsey’s BlueSky social network for example, is an organizational structure where control is distributed among its members using smart contracts on a blockchain, and participants use governance tokens to vote on proposed actions, allowing for a decentralized decision-making process.
Bringing Haney’s fellow assembly up to speed is the first step to addressing the complex topic of DAOs, and blockchain technology.
“Our goal is to educate our colleagues on blockchain basics, California corporations, and the workings of Decentralized Autonomous Organizations (DAOs),” the spokesperson said. “By establishing a legal framework around DAOs, we can create certainty, legitimize this organizational type, and ensure appropriate taxation in California.”
The bill comes at a crucial time, as government regulators and officials around the world have set their sights on cryptocurrency. A crypto crackdown in the US was triggered by the collapse of FTX in November, led by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). State regulators have also stepped up their scrutiny of crypto projects.
“Whatever you call this new technology, blockchain, Web 3.0, or crypto, we know that it’s the future of tech,” Haney said in a statement. “It would be devastating to both our economy and our identity as a state to lose California’s place as the world’s tech leader because our laws are not keeping up with the times.”
What this means for your organisation
Legal certainty invites adoption.
Incorporation would let DAOs pay taxes and protect participants. Clear rules reduce risk for firms and investors. Legal teams should follow the bill closely.
New structures for collaboration.
Members vote with governance tokens through smart contracts. That suits shared projects across many parties. Consider where a DAO could run a joint venture.
Jurisdictions compete.
California wants Web 3.0 rooted in the state. Others will compete to attract the same firms. Watch where rules are most workable before choosing a base.
Three questions for your next leadership meeting
- Could a DAO structure suit any of our joint ventures?
- What legal risks do our staff face in DAO participation?
- Which jurisdictions offer the clearest rules for DAOs?
The trends and technologies behind this story
From the 311 Starburst, the 311 Strategic Intelligence Unit’s map of the technologies and trends shaping the next 50 years.
Analysis by the 311 Strategic Intelligence Unit, from Matthew Griffin’s article and 311 data. First published on Fanatical Futurist.
FAQ
Why does this matter?
DAO's are a "newish" form of decentralised or "headless" organisation and California wants to profit and benefit from them so is introducing new legislation to approve and regulate them.
About the author
Matthew Griffin Founder, President and Futurist, 311 Institute
Matthew Griffin is a multi-award winning Futurist and expert in Disruption and Innovation, Geopolitics, Leadership, and Technology, who NASA have described as a "walking encyclopaedia of the future" and a "futurist Polymath."
Read full bio
Matthew Griffin is a multi-award winning Futurist and expert in Disruption and Innovation, Geopolitics, Leadership, and Technology, who NASA have described as a "walking encyclopaedia of the future" and a "futurist Polymath." 17-time best selling author of the "Codex of the Future" series, Matthew is the Founder, President and Futurist of the 311 Institute, a global Futures and Deep Futures advisory firm working with royal households, world leaders, G7, G20, and G77 governments, NGOs, and multi-national mid and mega cap firms to help them explore, shape, and lead the next 50 years of business and society.
An award-winning YouTube creator with over a million followers, with an unrivalled global reach and impact, Matthew is a highly sought-after international keynote speaker, lecturer, and mentor who collaborates with global leaders through the United Nations Alliance of Civilizations (UNAOC) and United Nations General Assembly (UNGA) to shape pivotal initiatives such as the UN’s AI for Humanity programme, the United Nations Conference of the Parties (UN COP), and the World Economic Forum in Davos.
As the former Global Head of Cloud, National Security, and Enterprise Sales for companies including Atos, Dell-EMC, and IBM, Matthew has a proven track record of building multi-billion dollar business units and turning failing divisions into market leaders. His ability to identify, analyse, and communicate the implications of hundreds of emerging technologies and trends is unparalleled, and his insights are trusted by many of the world’s most respected organisations, including ABB, Accenture, Adidas, AON, ARM, BCG, Centrica, Citi, Coca-Cola, Dentons, Deloitte, Dow Jones, EY, Google, KPMG, Lego, Legal & General, LinkedIn, Microsoft, PepsiCo, Qualcomm, RWE, Samsung, Siemens AG and Siemens Energy, T-Mobile, UBS, VISA, Walmart, Workday, Worldpay and many others.
Regularly featured in the global media including the AP, BBC, Bloomberg, CNBC, Discovery, Forbes, Khaleej Times, Telegraph, TIME, ViacomCBS, WIRED, and the WSJ, Matthews mission is to help organisations create a fair and sustainable future whose benefits are shared by everyone irrespective of their ability, background, or circumstances.
What future do you need to see?
Choose one to get started on connected society and the future of your organisation.
Source: first published by the 311 Institute on 30 April 2023. Cite as: Griffin, M. (2023). DAO’s could soon get legal standing under new California law. 311 Institute. https://www.311institute.com/daos-could-soon-get-legal-standing-under-new-california-law/
You are welcome to quote this article with credit and a link to the original.