Wyoming
Wyoming wants to become the Delaware of DAOs with new crypto law for decentralized autonomous organizations
On Thursday, Wyoming’s Republican governor, Mark Gordon, signed into law the Decentralized Unincorporated Nonprofit Association Act, a landmark bill that establishes a framework for recognizing DAOs as legal entities.
Wyoming has long positioned itself as the friendliest state toward the crypto industry—not unlike Delaware’s attitude toward corporations—and the new law is the latest in a series of measures to attract blockchain firms to the Cowboy State. With support from a16z crypto, the legislation tackles one of the thorniest legal issues in the nascent sector: how to fit decentralized organizations into existing financial regulation.
In an exclusive interview with Fortune, state Sen. Chris Rothfuss, a Democrat and cochair of the Select Committee on Blockchain that sponsored the bill, said the measure reinforces Wyoming’s nation-leading approach to digital asset regulation as the federal government remains gridlocked.
“This DUNA legislation is just the most recent puzzle piece,” he said. “We wanted to make sure that we had the flexibility to figure out what the best practices and policies and use cases were in a legislature that was actually capable of being responsive and adaptive.”
The DAO problem
Decentralized autonomous organizations, or DAOs, are a unique structure born from the blockchain industry. Rather than deploying a traditional corporate structure, with a board of directors responsible for investors’ fiduciary interests, DAOs are composed of community members who vote on how to manage an organization, generally through holding governance tokens that are native to the group.
The concept may seem esoteric, but there have been high-profile instances in the past few years, including ConstitutionDAO, where people banded together in an attempt to buy one of the last remaining copies of the U.S. Constitution.
The novel structure has also created legal headaches for both crypto acolytes and regulators, most notably in an enforcement action by the Commodity Futures Trading Commission against Ooki DAO, which the agency charged with operating an illegal trading platform. In an unprecedented step, the CFTC held every token holder liable for the actions of the organization and served its members via a help chat box on the organization’s website.
“It is possible that DAOs are just the worst of all worlds: Their tokens are similar enough to corporate shares to be subject to securities laws, but different enough to create unlimited liability for their holders,” Bloomberg’s Matt Levine wrote at the time.
As Rothfuss told Fortune, Wyoming has a history of creating new rules around corporate structures, including becoming the first state to adopt the limited liability corporation, or LLC. Among its crypto initiatives, Wyoming also created a digital asset-focused banking charter called the Special Purpose Depository Institution, which took on national prominence after one charter holder, the Caitlin Long-led Custodia Bank, sued the Federal Reserve over being denied a master account.
Wyoming attempted to address DAO supervision previously with a 2021 law that created an LLC structure for the decentralized organizations. In an interview with Fortune, a16z crypto general counsel Miles Jennings explained that the framework created potential complications under securities laws, because the membership interests in LLCs—tokens, in this case—are generally considered securities. Furthermore, the Corporate Transparency Act, passed by Congress in 2021, required LLCs to report ownership—an impossibility for DAOs, some of which have hundreds of thousands of members scattered across the world. The 2021 legislation ultimately failed to attract DAOs to Wyoming.
DUNA
Instead of structuring DAOs as LLCs, the new law uses the model of unincorporated nonprofit associations, which means its purpose is not to generate profits for its owners—although it can still generate revenue and compensate DAO members.
Jennings explained why the new structure is necessary: It gives DAOs legal existence, it enables them to contract with third parties and appear in court, and it enables them to pay taxes and have limited liability from the actions of other members.
The structure would not prevent regulatory enforcement if DAOs break the law. Instead, it would allow the DAO to hire legal counsel and appear in court, and it would mean that every voting member of the organization wouldn’t necessarily be liable for the DAO’s actions—like how Enron shareholders weren’t held liable for fraud.
Jennings described DUNA as a “boon” for the government, as it would bring DAOs into the existing tax framework and generate revenue. The law attempts to circumvent the pesky question of whether crypto tokens should be considered securities, with DAOs having no directors, officers, or mission to maximize profits. Still, Jennings admitted that the structure may not escape the attention of the Securities and Exchange Commission, which has attempted to establish oversight over the vast majority of crypto assets.
The biggest challenge for Wyoming may be convincing existing DAOs—many of which reflect the “degen” spirit of rebellion endemic to the crypto industry—to adopt the new structure. Jennings said a16z crypto plans to work with portfolio companies on doing so and make it a condition for future investments.
“Some within the industry think that if you don’t subject yourself to the regulatory regime of a given jurisdiction that you’re somehow not subject to it,” Jennings told Fortune. “By doing that, you’re actually subjecting yourself to all jurisdictions.”
“If you want to provide for yourself all the legal protections that exist, for ordinary businesses, this is a much better way to achieving that,” he added.
Wyoming
Residents celebrate Wyoming Statehood Day by revealing their favorite thing about the Cowboy State
Wyoming
Election Q&A: Laurie Longtine for Wyoming House District 59
CASPER, Wyo. — As the Aug. 18 primary election approaches, Oil City News is introducing candidate questionnaires to help voters make informed decisions at the ballot box.
Every candidate in the primary field was sent the same three questions and given a limit of 500 words, which could be distributed among their answers as they saw fit. To ensure a fair and direct line to the community, all responses are published exactly as submitted, without edits or alterations.
Candidates were asked:
- What are the most crucial challenges your constituents are facing?
- If elected, how will you address these challenges?
- What qualities or qualifications do you possess that have prepared you to meet these challenges?
Questionnaires are being published on a rolling basis online through Aug. 11. They will be accessible via the Oil City News Election Tracker.
Additionally, Oil City News will mail a comprehensive print voters guide directly to all Natrona County households in mid-July, featuring all questionnaires received by July 6.
Laurie Longtine (D), Wyoming House District 59
What are the most crucial challenges your constituents are facing?
Working families in Natrona County have the same concerns as families throughout the country. Families want to ensure their children are safe, healthy, and well educated. Right now, reductions in revenue are affecting all three of these issues.
If elected, how will you address these challenges?
I will work tirelessly to ensure the public schools that educate our children are fully funded, that working families have access to affordable healthcare, and that counties and municipalities have the necessary revenue to provide the services we all depend on in our communities.
What qualities/qualifications do you possess that have prepared you to meet these challenges?
I have worked in various management roles in a broad variety of businesses. Currently I volunteer with several organizations and have held leadership roles in the different clubs and organizations I have been part of over the years.
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Wyoming
Wyoming officials say Meta’s 715,000-square-foot data center is responsible for contaminating its water system with a rare bacterium | Fortune
Cheyenne, Wyoming, officials say Meta’s data center construction is responsible for the contamination of part of the town’s recycled water system.
The Board of Public Utilities (BOPU) traced the presence of a bacterium discovered in its wastewater treatment facility earlier this year to Goat Systems LLC, a Meta contractor for the tech company’s in-progress 715,000-square-foot data center campus, according to recent public notices from the BOPU.
The bacterium did not enter Cheyenne’s drinking water supply and was found in systems used for irrigation purposes only. Cupriavidus gilardii is a rare organism typically found naturally in water and soil. Infections from this bacterium are extremely rare, BOPU said, but can pose a threat to elders and immunocompromised individuals directly exposed to it.
It was discovered during routine testing in February, prompting BOPU to temporarily suspend the city’s reclaimed water irrigation program and terminate Meta’s discharge privileges.
The board also announced last week it would not accept industrial wastewater discharges associated with fill-and-flush operations—which circulates, then flushes purified water to eliminate construction debris and residue—nor closed-loop cooling systems popular in data centers that circulate coolants mixed with water.
The board classified the incident as “significant non-compliance with federal pretreatment regulations.”
“Over the past two months, BOPU staff have undertaken significant remediation efforts, including draining and disinfecting the entire reuse water system and Prairie View Pond to eliminate any remaining bacterial presence,” one notice said.
Cheyenne’s BOPU declined Fortune’s request for comment and said it will hold a press conference in the next week with additional details on the situation.
A Meta spokesperson told Fortune the company is supporting Fortis, its general contractor, in its efforts to resolve the problem, and that Fortis began testing its own water through a third-party environmental specialist, who found no traces of the bacterium.
“When the board shared that it found a substance in the city’s wastewater—not public drinking water—Fortis immediately stopped discharging industrial wastewater and began hauling it offsite,” a spokesperson said in a statement. “Meta is committed to being a good neighbor in Cheyenne, including through the protection of local water resources, and will continue encouraging collaboration between Fortis and the board until this situation is resolved.”
Pollutants from data center construction and operations are part of the mounting anxieties Americans have around the exploding growth of AI infrastructure around the country. A recent Gallup poll found about 70% of Americans somewhat or strongly oppose the construction of data centers in their local area. While half of respondents cited environmental concerns, such as excess water usage and deforestation, 16% of respondents cited pollutants, including air and water contamination, among reasons for their opposition.
Meta announced the construction of the Cheyenne data center in July 2024, saying it would be the company’s 21st data center in the U.S. and 25th globally. According to the company, Cheyenne provided access to infrastructure and energy and had a large talent pool from which to recruit.
Meta projected that the $800 million investment would sustain more than 1,000 construction jobs at the height of the build and support 100 jobs once completed. The campus is one of 27 data centers in Cheyenne and 31 in Wyoming. By comparison, Northern Virginia has the most data centers in the country, with about 550.
The tech company, for its part, previously said it would allocate resources toward the energy grid and water-cleanup efforts, including working with Black Hills Energy and the Laramie County Conservation District to restore Crow Creek, which recharges the state’s Ogallala Aquifer.
“Meta wants to be a positive contributor in communities like Cheyenne,” the company’s announcement said. “And that includes investing in the energy grid and supporting local water restoration projects.”
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