Subcommittee advances bill creating limited‑liability entities for blockchain DAOs after mixed testimony

The subcommittee voted to advance legislation to recognize limited‑liability digital entities—often discussed as a vehicle for decentralized autonomous organizations—after a short but pointed hearing.

Delegate Delvia Helmer, the bill’s patron, said the measure makes clear that “LLDs are subject to the same state and federal tax requirements as LLCs,” and argued the change would allow Virginians to form and regulate on‑chain organizations under Virginia law rather than registering out of state.

Supporters from the blockchain industry told the committee the bill clarifies how decentralized groups organize and preserves investor protections. Zach LaMaster, representing the Virginia Blockchain Council, said he supported the substitute. Helen Sharp of Americans for Prosperity told the subcommittee, “Token holders deserve the same basic protection when investing in decentralized projects,” and said limited liability encourages investment and innovation.

The Virginia Bar Association’s Eric Link said the group appreciated the patron’s work but opposed the bill “at this time” because of “ongoing liability concerns.” Link told the committee that key questions about who would bear responsibility in abusive or fraudulent scenarios had not been resolved.

Committee members discussed whether the bill preserved existing LLC infrastructure and whether the State Corporation Commission and registered‑agent framework would be effective for LLDs. After discussion, Delegate Keith Gamara moved to report the bill with a substitute; the motion was seconded and the roll was opened. The subcommittee recorded a 5–3 result and advanced the bill out of the panel.

The next steps include drafting final substitute language and any technical edits requested by the Bar Association and other stakeholders. The patron indicated ongoing conversations with regulators and the ABA to address liability and disclosure concerns.