Wyoming Blockchain Stampede 2021

Abstract

A cursory examination of Wyoming’s groundbreaking digital asset legislation.

Objectives

Learn the digital-asset related laws passed by Wyoming and why they are important.

Outline

Wyoming Blockchain Initiatives, 2018

HB019: Money Transmitters Act: Our first initiative exempts cryptocurrencies from the Money Transmitters Act. Alone, this legislation will allow Cryptocurrencies to operate in Wyoming, adding a vital new industry to the State’s financial sector. In combination with the rest of our initiatives, it will foster cryptocurrency developers in Wyoming as well.

HB101: Electronic Records: The goal of this legislation is to allow corporate records to be kept on a distributed ledger system. This also allows for corporate formations and UCC filings to be registered using Blockchain technology.

HB070: Initial Coin Offering and Utility Token (ICO/UT) safe harbor language: There is considerable confusion on a nationwide basis as to whether an ICO or UT is a security (and as such regulated by the SEC). As many of these only represent advanced sales of software, services or property, Wyoming can create language that will clear the confusion. Alone, this will set a standard for the entire nation to follow. In combination with our other initiatives, it will provide an incentive for both the developers and the investors to locate in Wyoming (providing additional revenues to the State).

HB126: Series LLCs: Designating Series LLCs as a separate form of entity will allow Wyoming to continue to compete with Delaware as a home for entity formations. The Series LLC is a preferred form of entity for many developers in the Blockchain ecosystem.

SF111: Exempts Digital Assets from property tax

Wyoming Blockchain Initiatives

2019

HB 57, Fintech Sandbox: Authorizes Wyoming’s Secretary of State and/or the Banking Commissioner, upon approval of an application and the posting of a consumer protection bond, to waive statutory or rule provisions that would otherwise prevent the product or services from being offered. It allows both to specify limits on numbers of customers and place other constraints as necessary.

HB 62, Wyoming Utility Token Act: Amended and expanded the utility token provisions enacted by HB 70 in 2018 and moved them to a newly-created chapter of Wyoming’s property statutes. There is no longer an exemption from Wyoming’s securities statutes, but instead a new chapter under Wyoming’s statutes that classifies utility tokens as intangible personal property and specifies the treatment of utility tokens under existing laws.

HB 70, Commercial Filing System: Authorized the Secretary of State to develop and implement a blockchain-based commercial filing system for business entity registrations, reports, UCC and other filings.

HB 74, Special Purpose Depository Institutions: creates special purpose depository institutions to serve businesses which may not have access to traditional banking services, including blockchain businesses. The bill provides that a special purpose depository institution would provide services only to businesses, must comply with all applicable State and federal laws, would not be able to make loans and would require a 100% reserve .

HB 113, Special Electric Utility Agreements: enables Wyoming’s electric utilities to enter into service agreements with cryptocurrency miners and other large volume users that are segregated from all other customers of the utility, so that all costs, benefits and losses (direct or indirect) from such agreements would be borne by the shareholders, not the other customers.

HB 185, Corporate Stock Certificate Tokens: Gives Wyoming corporations the ability to issue certificate tokens on a blockchain in lieu of stock certificates.

SF 28, Banking Technology and Stock Revisions: authorizes the use of electronic records by banks, including allowing banks to identify shareholders by a data address.

SF 125, Digital Assets-Existing Law: Classifies digital assets by type (virtual currencies, digital securities and digital consumer tokens), would specify the treatment of each type of digital asset under existing commercial laws, and would define a method for perfecting security interests in digital assets. The bill also provides an opt-in regime for Wyoming banks to become Qualified Custodians of digital assets

pursuant to the SEC’s Custody Rule, acting as a directed trustee, and specifies investor protections that opting-in banks must meet.

Other notable legislation:

SF104 – Chancery Court

HB236 – Statutory Foundation Act

Wyoming Blockchain Initiatives, 2020

Digital Expression Protection Act-HB 08 (Effective Immediately)

Relates to digital expression; providing limitations on criminal liability for digital expression as specified.

Municipal Bonds-Digital Securities-HB 20 (Effective 7/1/2020)

Relates to public securities; authorizing issuance of certain bonds as digital securities.

Insurance Investments-Digital Assets-HB 21 (Effective 7/1/2020)

Relates to insurance; authorizing investment in digital assets by an insurer.

Select Committee on Blockchain, Tech and Innovation-HB 27 (Effective Immediately)

Relates to the legislature; creating the select committee on blockchain, financial technology and digital innovation technology; providing for appointment of members and executive branch liaisons; providing appropriations.

Special Purpose Depository Institutions-Amendments-HB 45 (Effective Immediately)

Relates to banking; expanding the authority of special purpose depository institutions to engage in incidental activities with the public as specified; amending the application timeframe for a special purpose depository charter; authorizing the commissioner to provide a fee exemption; specifying the types of security that can be pledged by a special purpose depository institution in lieu of a surety bond; clarifying a continuous appropriation; repealing a provision requiring depositor services and the issuance of special purpose depository accounts; specifying applicability.

Digital Assets-Statutory Amendments-SF 47 (Effective Immediately)

Relates to digital assets; modifying the means to perfect a security interest in virtual currency and digital securities; modifying provisions relating to security agreements involving virtual currency and digital securities; providing definitions; specifying factors relating to location of digital assets used as collateral; amending duties and requirements for banks that provide custodial services; amending the scope of authorized custodial services; clarifying application of digital asset statutes; clarifying the duty of digital asset custodians to pay supervisory fees; clarifying the jurisdiction of Wyoming courts to hear cases related to digital assets; and providing for an effective date.


Wyoming Blockchain Initiative, 2021

SF0038 – Decentralized Autonomous Organization Supplement. Creates a new form of entity (The DAO LLC) and provides for limited liability of the members.

HB0043 – Digital Assets – Amendments. A housecleaning bill that amends prior statutes to allow for the perfection of security interests in digital assets and defines a consumer’s relationship with a custodial bank when digital assets are held in custody.

SF0039 – Digital Identity Act. Defines the relationship between a digital identity and the natural person or organization attributable to that identity.