Why Wyoming fits Web3 founders
Three things matter for Web3 legal structure. First, the state needs to recognize digital assets as property. Wyoming does (Section 34-29-101). Second, the state should have a DAO-friendly framework. Wyoming has the only US DAO LLC statute (Section 17-31-101). Third, the state should respect founder privacy. Wyoming does not list members or managers on Articles of Organization.
So for any Web3 founder, Wyoming is the natural US choice. Delaware works for traditional venture-backed structures. But Web3 founders often want the DAO option or the digital asset legal recognition that Wyoming explicitly provides.
In our intake across roughly 800 clients, Web3 founders pick Wyoming over Delaware about 80% of the time. The 20% who pick Delaware are usually doing a token issuance with US-resident lawyer review and prefer the more litigation-tested Delaware structure.
- Wyoming Statutes 34-29-101: digital assets are property
- Wyoming Statutes 17-31-101: DAO LLC framework
- Wyoming Statutes 17-29-503: strongest US charging-order protection
- No state income tax (including on token revenue)
- No member or manager names on public filings
- Cheaper annual maintenance than Delaware ($60 vs $300)
Wyoming DAO LLC vs regular Wyoming LLC
A regular Wyoming LLC has traditional governance through members and managers. Decisions happen through written consents, voting, and operating agreement provisions. This is the right structure for most Web3 founders, even those building protocols with on-chain governance.
A Wyoming DAO LLC explicitly recognizes algorithmic or smart-contract-based governance. You elect DAO status at formation (or convert later). It is mostly useful when the protocol's governance is on-chain and you want formal legal recognition that on-chain votes have legal effect.
For most Web3 founders we serve, the regular LLC is the right starting point. You can always convert to DAO LLC later if your governance evolves. The DAO LLC tax treatment is identical to a regular LLC (pass-through by default).
| Feature | Regular Wyoming LLC | Wyoming DAO LLC |
|---|---|---|
| Governance model | Members and managers | Algorithmic or on-chain |
| Filing fee | Same as regular LLC | Same as regular LLC |
| Tax treatment | Pass-through by default | Pass-through by default |
| Operating agreement required | Yes | Yes (governance defined) |
| Best fit | Standard Web3 operations | On-chain governance protocols |
| Conversion later | N/A | Can convert regular LLC into DAO LLC |
Token issuance through a Wyoming LLC
Issuing tokens through your Wyoming LLC has US securities law implications regardless of which state you form in. The Howey test, the SEC's Framework for Digital Asset Securities, and the recent enforcement trend all matter. So forming in Wyoming does not change the SEC's view of your token sale.
What Wyoming does help with is the holding and treasury side. The LLC can own the protocol's treasury, sign vendor contracts, pay developers, and handle fiat conversions. This is true whether you do a public token sale or a quieter incentive token distribution to early users.
Talk to a US securities lawyer before issuing tokens. The legal structure is one layer. Securities compliance is another. Form 5472 reporting is a third. All three need to be right.
Banking for Web3 protocol startups
Banking is the hardest part for Web3 founders. Mercury rejects pure protocol companies at higher rates than any other Web3 category in our intake. The banks are nervous about MSB (Money Services Business) classification, securities exposure, and AML/KYC complexity that protocols can create.
Relay tends to approve Web3 protocols more readily than Mercury. Wise Business is the safest fallback at 95%. For pure crypto-native operations, Custodia Bank (Wyoming SPDI) handles complex crypto treasury operations that traditional banks reject.
Most Web3 founders we work with land at Relay for primary fiat operations, Wise for cross-border, and a self-custody multisig (Gnosis Safe) for protocol treasury. Mercury sometimes works after you have 6 to 12 months of clean operating history.
Common Web3 founder mistakes with Wyoming LLCs
- Forming a DAO LLC when a regular LLC is the right starting point (adds governance complexity you do not need yet)
- Issuing tokens without US securities legal review (Wyoming structure does not provide securities-law cover)
- Treating protocol treasury and personal wallet as the same (kills the legal liability shield)
- Skipping Form 5472 because the LLC mostly handles crypto (still mandatory, $25K penalty)
- Not documenting multisig signers and key management in the operating agreement
- Choosing Mercury as primary bank without checking the rejection pattern for protocol companies
- Forgetting that home country may tax worldwide income including LLC pass-through revenue
What the $397 package covers for Web3 startups
- Wyoming LLC formation under Title 17, Chapter 29 within 24 hours
- Optional DAO LLC election at formation (Section 17-31-101)
- Wyoming registered agent for year 1
- Custom operating agreement with Web3-specific clauses (wallet ownership, multisig signers, governance)
- EIN via IRS Form SS-4 (no SSN required)
- Direct introductions to Mercury, Relay, Wise Business, and Custodia Bank where applicable
- Document delivery as searchable PDFs
- WhatsApp and email support across NYC and Dhaka time zones