- This is stated in the bill HB357, adopted March 1
- He equates DAO to legal entities with clear taxation
- At the same time, almost all participants can remain anonymous.
- The law will come into force in early 2024
Last Wednesday, March 1, Utah passed the Decentralized Autonomous Organizations Act (HB357). This bill not only gives the DAO a certain legal status, but also establishes a clear tax regime.
The Utah Legislative Assembly Task Force on Blockchain and Digital Innovation was involved in developing the initiative. Kirk Cullimore introduced the bill in the Senate.
According to the authors, earlier DAOs appeared in the regulatory field as a kind of “subclass” of LLC (limited liability companies). But this approach has a number of disadvantages.
The law is a framework law; it will not serve as a panacea for business. It will not solve those open problems that exist now. For example, the pluralism of bodies that regulate. There are a lot of them, from the SEC to tax-type CFTC and so on. A lot of different organs and very little specifics. There is no federal regulation of the DAO issue, and there is no crypt in general, although there are bills that have been pending since the autumn from the US Congress. There is also a certain struggle between regulators that contribute to not resolving this open issue at the federal level. If suddenly Utah somehow contradicts future federal legislation, then you still have to change the rules of the game, which were defined specifically by their DAO.
This decision rather acts as a kind of bridge between the legal world and the blockchain world, simplifying some terms for perception. But he is not yet able to solve and take into account all the problems in this area.
Utah in this case acts as a kind of “polygon”. If the legal model adopted here shows itself well, it is possible that similar legislation will work throughout the country.
So, what is the key idea of the bill? It can be written down as follows:
- clear legal status and protection against expropriation of property in case of bankruptcy;
- unified tax regime for DAO;
- elimination of implicit fiduciary duties for the participants of the organization;
- the creation of the “Charter”, which spelled out the protection of the anonymity of members of the DAO;
- access control technology.
Naturally, some points of the bill caused heated debate. In particular, this concerns the anonymity of participants. As a result, the parties came to a compromise. So bill HB357 obliges any DAO to disclose one of the co-founders. Other participants may remain anonymous.
The bill was passed in the Senate and the House of Representatives. It will enter into force in early 2024. By then, the parties should have worked out a suitable tax language for the DAO.
Over the past months, an interesting shift in the regulatory field at the local level has begun in the US. And while, for example, miners are being protected in Mississippi, in Illinois they are trying to force service providers to add the possibility of canceling transactions to the blockchain.
