SC Decentralized Autonomous Organization Act

2025-2026 Bill 4766: SC Decentralized Autonomous Organization Act - South Carolina Legislature Online

South Carolina General Assembly
126th Session, 2025-2026
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H. 4766
STATUS INFORMATION
General Bill
Sponsors: Rep. M.M. Smith
Document Path: LC-0236HA26.docx
Introduced in the House on January 13, 2026
Currently residing in the House Committee on
Labor, Commerce and Industry
Summary: SC Decentralized Autonomous Organization Act
HISTORY OF LEGISLATIVE ACTIONS

Date

Body

Action Description with journal page number

12/16/2025

House

Prefiled

12/16/2025

House

Referred to Committee on
Labor, Commerce and Industry

1/13/2026

House

Introduced and read first time (
House Journal-page 107
)

1/13/2026

House

Referred to Committee on
Labor, Commerce and Industry
(
House Journal-page 107
)

View the latest
legislative information
at the website
VERSIONS OF THIS BILL
12/17/2025

A bill

TO AMEND THE SOUTH
CAROLINA CODE OF LAWS BY ENACTING THE "SOUTH CAROLINA DECENTRALIZED AUTONOMOUS
ORGANIZATION ACT" BY ADDING CHAPTER 58 TO TITLE 33 SO AS TO PROVIDE
REQUIREMENTS FOR DECENTRALIZED AUTONOMOUS ORGANIZATIONS, INCLUDING
ORGANIZATION, GOVERNANCE, LIABILITY FOR MEMBERS, AND DISSOLUTION.

B
e it enacted by the
General Assembly of the State of South Carolina:

S
ECTION 1.
This act may be cited as the "South Carolina Decentralized Autonomous
Organization Act."

S
ECTION 2.
T
itle 33 of the S.C. Code is amended by adding:

C
HAPTER 58

D
ecentralized Autonomous Organization

S
ection
33-58-10
.
A
s used in this chapter:

(
1)
"Algorithmically managed decentralized autonomous organization" or
"algorithmically managed DAO" means a decentralized autonomous organization
where governance is primarily conducted by smart contracts with minimal or no
human involvement, provided that a fallback mechanism exists for human
intervention in cases of system failure or vulnerability.

(
2)
"Articles of organization" means the initial formation document required to
establish a decentralized autonomous organization pursuant to South Carolina
law.

(
3)
"Blockchain" means a decentralized, distributed ledger technology that securely
records transactions in a verifiable and immutable manner.

(
4)
"Decentralized autonomous organization" or "DAO" means a blockchain-based
organization, recognized as a limited liability company pursuant to South
Carolina law, whose governance is primarily maintained through smart contracts
deployed on a blockchain or other distributed-ledger technology. DAOs enable
decentralized decision-making and operations without centralized
intermediaries, often using governance tokens to grant voting rights to
participants in order to facilitate transparent and community-driven
governance. Governance models include member-managed DAOs and algorithmically
managed DAOs.

(
5)
"Member-managed DAO" means a DAO in which governance and decision-making are
executed through direct member participation and voting.

(
6)
"Operating agreement" means the agreement that governs the internal affairs of
a DAO, including member rights, governance, and operational procedures.

(
7)
"Smart contract" means an automated transaction executed on a blockchain-based
system that facilitates, verifies, or enforces contract terms without
intermediary involvement.

S
ection
33-58-20
.
(
A) A DAO in South
Carolina must be created by filing articles of organization with the Secretary
of State, specifying that the organization is a DAO and electing either
member-managed or algorithmically managed governance.

(
B) A
DAO shall have the same rights, privileges, duties, and obligations as a
traditional limited liability company, except as inconsistent with this
chapter.

(
C)
The name of a DAO must include the designation "DAO," "LAO," or "LLC" to
distinguish it from other business entities. "LAO" means a limited autonomous
organization.

S
ection
33-58-30
.
(
A) A DAO must adopt an
operating agreement that must include, but is not limited to:

(
1)
the governance structure;

(
2)
rights and duties of members, including voting mechanisms;

(
3)
the role and functionality of smart contracts in decision-making, including a
method for upgrading or amending as necessary to allow for adaptability as
blockchain technology evolves;

(
4)
procedures for amending smart contracts and governance; and

(
5)
a protocol for handling technical failures, including potential manual
overrides where necessary to protect DAO assets and members.

(
B) A
DAO shall be governed by its operating agreement and the provisions of this
chapter. In cases of conflict, the provisions of this chapter shall prevail.

S
ection
33-58-40
.
(
A) Members of a DAO
shall not be personally liable for the debts, obligations, or liabilities of
the DAO, except in cases of fraud, knowing violations of law, or wilful
misconduct. However, members who exert significant control over DAO decisions
beyond smart contract execution may be subject to traditional fiduciary duties
under corporate governance principles.

(
B) A
DAO shall have the capacity to sue and be sued in its own name.

S
ection
33-58-50
.
(
A) A DAO may be
dissolved voluntarily through the procedures described in its operating
agreement, which must include provisions for handling smart contract assets and
obligations.

(
B)
The Secretary of State may dissolve a DAO for failure to comply with reporting
requirements, failure to maintain smart contract functionality, or other
material breaches of this chapter.

S
ection
33-58-60
.
A
DAO must file an annual report with the
Secretary of State including, but not limited to:

(
1)
confirmation of its continued operations;

(
2)
any material updates to its governance structure or smart contracts; and

(
3)
information regarding major security incidents, if applicable.

S
ection
33-58-70
.
A
ny issuance of DAO tokens:

(
1)
may be subject to applicable federal securities and commodities laws; and

(
2)
must maintain compliance with all applicable state and federal laws including,
but not limited to, anti-money laundering and know-your-customer requirements
when applicable.

S
ection
33-58-80
. The courts of this State shall have jurisdiction over DAOs formed
pursuant to this chapter.

S
ection
33-58-90
. Nothing in this chapter shall be construed to limit the application
of securities, taxation, or other regulatory laws applicable to DAOs.

S
ECTION 3. If any section, subsection,
paragraph, subparagraph, sentence, clause, phrase, or word of this act is for
any reason held to be unconstitutional or invalid, such holding shall not
affect the constitutionality or validity of the remaining portions of this act,
the General Assembly hereby declaring that it would have passed this act, and
each and every section, subsection, paragraph, subparagraph, sentence, clause,
phrase, and word thereof, irrespective of the fact that any one or more other
sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases,
or words hereof may be declared to be unconstitutional, invalid, or otherwise
ineffective.

S
ECTION 4. This act takes effect upon approval
by the Governor.

----XX----

This web page was last updated on January 13, 2026 at 2:40 PM