US: Wyoming Set Precedent By Creating New Asset Class For Cryptos, Hopes to Inspire Feds
The US state of Wyoming has now created a new class of assets in defining cryptocurrency as “Utility Tokens”, reports Forbes March 13.
As previously reported by Cointelegraph, the Wyoming state legislature passed House Bill 70 on March 6, which effectively exempts crypto from state securities regulations. The bill was signed into law by Governor Matt Mead March 8.
The new law excludes developers and sellers of tokens from state securities laws under the condition that they meet a certain number of caveats, namely that it must be used as a token for the exchange of goods and services and must not be marketed as an investment.
Co-founder of the Wyoming Blockchain Coalition Caitlin Long remarked on the important precedent set by the new law:
“The state of Wyoming is the first elected body in the world to define a utility token as a new type of asset class different from a security or commodity. This has been a hot topic in Washington D.C. recently, as the SEC considers cryptocurrencies to be securities, FinCEN says they’re generally money, and the CFTC views them as commodities. Now, however, you have a state coming out and defining utility tokens as a new form of property, and property is generally the purview of state law.”
Long and other members of the coalition believe that the new precedent may be a framework by which Washington will approach cryptocurrency regulation in the near future. Long added that, “I do believe the Wyoming approach will work under federal securities law and am optimistic the SEC will agree.”
House Bill 70 is one of five bills that have recently been turned into law in the state of Wyoming that aim to boost crypto and Blockchain businesses in the state. House Bill 19 amended the state’s money transmission laws that had previously prevented exchanges from effectively operating within the state; Coinbase and two other exchanges actually pulled out of the state in 2015. The remaining three pieces of legislation, all introduced by Long, aim to make Wyoming more competitive in attracting new crypto business.
House Bill 101 authorizes Wyoming corporations to create Blockchains to store records and the use of a network to identify shareholders and the acceptance of shareholder votes.
House Bill 126 allows the creation of “series LLCs” which are favorable to decentralized protocols as it enables LLCs to establish a compartmentalized series of members/managers, transferable interests or assets, and distributions to members. Senate Bill 111 exempts cryptocurrency from Wyoming state property taxes.
Speaking to Forbes, Governor Mead mentioned the proactive measures the state has been taking to turn Wyoming into, “a big technology state” including the establishment of the ENDOW Executive Council; Economically Needed Diversity Options for Wyoming.