Virginia at Forefront of Blockchain-Driven Business Innovation with DAO Act

Rikka Law blog post illustration: Virginia at Forefront of Blockchain-driven Business Innovation With DAO Act
Headshot photo of Charlyn Ho, CEO Rikka Law Group | Co-Founder Enzio.ai at Rikka Law
Charlyn Ho
CEO Rikka Law Group | Co-Founder Enzio.ai
May 27, 2025·Insights

Virginia is considering the legal recognition of Decentralized Autonomous Organizations (DAOs), which are blockchain-based entities that have no central leadership, governed instead by member votes using tokens and smart contracts.

In an opinion piece for Cardinal News, Rikka founder, Charlyn Ho, explains how the proposed Virginia DAO Act (HB 1796) aims to allow DAOs to register as limited liability companies under state law, providing them with legal standing, limited liability protections, and operational clarity. Though the bill is currently amended to a study, it represents a forward-looking step toward legitimizing blockchain-driven business models.

DAOs function via smart contracts, which automatically execute decisions based on pre-set rules. This structure ensures transparent, decentralized governance, but raises issues around accountability, since there is no central authority to hold responsible for missteps.

Currently, there are more than 13,000 DAOs globally, spanning various uses such as:

  • Protocol DAOs (e.g., crypto exchanges)
  • Philanthropy DAOs (grant funding)
  • Social DAOs (interest-based communities)
  • Collector DAOs (art investment)
  • Venture DAOs (pooled capital for startups)

Wyoming, Tennessee, and Vermont have already passed DAO-friendly laws. If Virginia follows, it could become a leader in blockchain business innovation, attracting investment, creating jobs, and boosting tax revenue.

Ultimately, legally recognizing DAOs could help balance innovation with legal safeguards, ensuring that the future of decentralized business is both technologically advanced and responsibly managed.

Read the full article on Cardinal News.