- The Samuels v. Lido DAO ruling accelerated the shift toward formal legal wrappers.
- Global competition continues as the United States and Switzerland shape their own frameworks.
- The Cayman Islands will implement the OECD Crypto-Asset Reporting Framework starting in 2026.
As Web3 projects reassess where to establish legal entities, the number of foundation companies registered in the Cayman Islands is rising sharply.
New data shows year-on-year growth in these registrations, indicating the jurisdiction is becoming a preferred destination for decentralized projects seeking legal clarity.
Growth accelerated from late 2024 and has continued into 2025, as communities and developers look for legal structures capable of supporting expanding ecosystems.
This trend reflects recent legal developments—particularly in the United States—that have prompted DAOs and Web3 organizations to pursue more predictable frameworks that protect participants from personal liability.
Changes in DAO structures
Cayman foundation companies are increasingly used as the legal wrapper for DAOs and as custodial entities for major Web3 networks.
By the end of 2024, registered entities exceeded 1,300, with more than 400 new registrations added in 2025.
Cayman Finance reported that many leading Web3 projects have chosen the jurisdiction, including at least 17 treasury foundations managing pools above the $100 million mark.
These entities allow DAOs to sign agreements, hold and manage intellectual property, hire contributors, and engage with regulators without exposing token holders to direct personal liability.
The shift accelerated following the Samuels litigation. In the 2024 Lido DAO decision, a U.S. federal court held that an unwrapped DAO could be treated as a general partnership under California law.
That ruling prompted many communities to re-evaluate their legal structures.
The Cayman model offers independent legal personality and asset ownership capabilities that help close this liability gap.
Paired with tax neutrality and a framework familiar to institutional developers and service providers, the jurisdiction has become attractive to projects that require compliance readiness and operational flexibility.
Global Web3 competition
Jurisdictions around the world are positioning themselves for the next wave of Web3 growth.
The United States has repeatedly expressed its intention to be a global crypto hub—especially under the current administration—but only a handful of states explicitly recognize DAOs as legal persons.
That leaves many organizations navigating a patchwork of rules at the entity level.
Switzerland remains an important home for Web3 foundations: the Crypto Valley region now hosts more than 1,700 active blockchain companies, a growth of over 130% since 2020.
Foundations and associations have become a growing feature of that expansion, even as projects diversify their choice of jurisdictions to find structures aligned with their long-term plans.
Compliance changes
The rise of Cayman Web3 foundations comes amid significant regulatory change.
The Cayman Islands has implemented the OECD’s Crypto-Asset Reporting Framework, with new Tax Information Authority regulations taking effect January 1, 2026.
The framework imposes due diligence and reporting obligations on “reporting crypto-asset service providers,” covering entities that convert crypto to fiat or other crypto, operate trading platforms, or provide custodial services.
Those providers must collect tax residency information from users, monitor specified transactions, and submit annual reports to the Tax Information Authority.
Legal advisers note that these rules are expected to apply mainly to providers engaged in exchange or broker-dealer activities.
Structures that merely hold crypto assets—such as protocol treasuries, investment funds, or passive holdings—may not fall within the reporting scope under current interpretations.
This distinction means many DAO-related foundations that function solely as ecosystem stewards or treasury managers, and do not run exchanges, brokerage, or custodial operations, can continue to benefit from Cayman legal certainty without taking on the full reporting burden.
As Web3 organizations mature and adapt to a changing compliance landscape, the Cayman Islands appears poised to remain a central node in the global distribution of decentralized governance structures.