Marshall Islands Recognizes the Legality of DAOs in its Region

A law that recognizes Decentralized Autonomous Organizations (DAOs) as limited liability companies (LLCs) now exists in the Marshall Islands. This Decentralized Autonomous Organizations Act of 2022 which was passed yesterday now expands the legality of DAOs making it suitable for legal entities which are registered in the country to adopt DAO structures and governance tools.

Also, profit and nonprofit DAOs can now register under the internationally recognized LLC structure. The governance, voting, and tokenization processes of DAOs will now be regarded as legal.

Ultimately, the government is hopeful that the law would influence the growth of decentralized entities and other related elements in the independent island state located in the Pacific Ocean near the Equator. 

In addition to all that the new legislation looks out for, the act will permit the creation of an investment fund for the government of the region to promote training and education related to DAOs and how they can be integrated into the economy. A registry process has been introduced by the Marshall Islands government for the crypto community to be facilitated by the Marshall Islands DAO (MIDAO).

The MIDAO will be the entity in charge of the onboarding of crypto and blockchain communities that wish to register as LLC in the region.

Marshall Islands Promote Decentralization With New Law

legal recognition of DAOs in the Marshall Islands started officially in February this year. They were allowed to operate on the island after appropriate registration. This DAO Act of 2022 is only a step further to expanding the option to other entities to integrate the DAO LLC identity.

“With this adoption of the DAO Act of 2022, The Marshall Islands commits its courts and its resources to the burgeoning world of decentralization, and recognizes the unique place that decentralized autonomous organizations can hold not just in the blockchain space, but in the broader economy as well,” the Minister of Finance of the Republic of the Marshall Islands Bransen Wase said.

Meanwhile, Ooki DAO member has been served a lawsuit by the Commodity Futures Trading Commission (CFTC) after an order from the United States Federal Judge William Orrick. This was after the Ooki DAO protocol solicited support from its community in relation to a previous CFTC lawsuit.