Update: Wyoming’s House of Representatives unanimously voted “aye” to pass two separate blockchain bills yesterday – HB 70 the “utility token” bill as well as HB 19 dubbed the “bitcoin bill” – forwarding them both to the State Senate for consideration.
HB 70 defines utility tokens as neither securities nor traditional currrency; HB 19 exempts digital currency from the 2003 Wyoming Money Transmitter Act.
HB 19: Cryptocurrency Now Exempt
HB 19 essentially exempts cryptocurrency from the Wyoming Money Transmitter Act.
A 2015 interpretation of this act by the Wyoming Division of Banking made it unorthodox for cryptocurrency exchanges to operate in the state of Wyoming.
As a result, for instance, cryptocurrency exchange Coinbase suspended it’s operations in Wyoming in June of 2015.
The passage of HB 19 heads Wyoming one step closer to crypto-friendly exchange regulation.
Should this bill receive a majority of the vote in the Senate crypto-exchanges such as Coinbase could resume operations in Wyoming.
HB 70: The Utility Token Defined
The Wyoming HB 70 bill defines exactly is a utility token aka “open blockchain token” as neither traditional currency nor as a security if it meets these conditions:
- The token is exchangeable for services or goods.
- The token in question has not been marketed by the protocol developers as an “investment opportunity”.
- The protocol developers have not entered into an agreement to locate buyers for the token nor entered into a repurchase agreement.
Thus, individuals who facilitate the exchange of an “open blockchain token” are not deemed traditional brokers of securities.
Additional Bills in the Pipeline:
The Wyoming House of Representatives is also reviewing bills HB 126 and HB 101 in the House of Representatives and bill SF 111 in the Senate.
HB 126, known in political circles as the “series LLC bill” allows for the creation of what are known as “series LLCs.”
This type of Limited Liability Company structure is favorable towards decentralized protocols as it allows LLCs to establish a compartmentalized series of managers, transferable assets, interests, and distributions to the members.
HB 126 passed the first reading in the House.
Bill HB 101, the “blockchain filings bill,” promises to update Wyoming’s Business Corporations Act to authorize the use of blockchains to store records and the use of a network address to identify a corporation’s shareholder. It will also the acceptance of shareholder votes signed by network signatures.
At a top level, HB 101 specifies prerequisites for all companies using electronic network or blockchain databases.
HB 101 has also now passed it’s first reading in the House.
BIll SF 111, dubbed the “crypto-property tax exemption bill,” has been approved in the House as of this writing, and the goal is to exempt all cryptocurrency from Wyoming state property taxes.
As of this writing, bill SF 111 is now awaiting consideration in the Senate.