Subcommittee backs bill to recognize decentralized autonomous organizations in Virginia

The Technology and Innovation Subcommittee voted to report House Bill 1796 — the Virginia Decentralized Autonomous Organization (DAO) Act — to the next committee, after the subcommittee adopted a substitute clarifying that DAOs are a legal entity distinct from limited liability companies.

Delegate Hilmer, the bill’s patron, told the subcommittee the measure recognizes DAOs — organizations whose activities are facilitated by blockchain technology — and creates a legal framework to allow registration and governance without folding DAOs into existing Virginia LLC law. “DAOs exist for a variety of purposes, including administration of a decentralized platform, exchange or application, philanthropic causes and funds for projects, social purposes for communities of specific interest and opportunities for pooled investments,” Hilmer said during his presentation.

The substitute revision explicitly states that the DAO recognition does not change existing LLC law and adds a delayed enactment date of July 2026 to give state systems time to adapt. The substitute also requires articles of organization to designate an “operator of record,” a person or entity that provides a contact for interaction with the DAO.

Supporters at the hearing, including George Munden of the Virginia Blockchain Council and public-policy witness Erlinda Doherty, said legal recognition would provide accountability and help attract digital companies. Munden told the committee, “We are in support of this bill. We think it's important for the state in general…so people can have a structure and understand accountability.”

The Virginia Bar Association, represented by Eric Link, opposed the bill, urging caution. Link warned that legitimizing DAOs could risk Virginia’s reputation as a stable place to do business because DAOs have been associated with fraud in other states. “If the subcommittee goes to adopt this bill, what they're doing is voting to adopt and legitimize DAOs using Virginia's well earned reputation as a friendly place for business and putting that on the line,” he said.

After discussion, Delegate Hayes moved that the subcommittee report HB 1796 and refer it to the Labor and Commerce Committee; the subcommittee recorded the vote to report the bill as 7 to 0. The substitute language and the delayed enactment were part of the version the subcommittee advanced.

The subcommittee hearing included public comment from both supporters and opponents and questions from members about physical addresses and how registrars would be listed; the sponsor and counsel confirmed the bill’s language requires a post office address recognized by the Postal Service and provides for a designated operator of record to give an in-state contact point.

The subcommittee’s recorded actions advance HB 1796 to the next stage of the legislative process, with the substituted language and the July 2026 effective date intended to give regulators and platforms time to implement registration and governance processes.

The subcommittee convened additional AI- and technology-related bills later in the same meeting.