In a landmark development for blockchain advancement, Wyoming’s state legislature has cleared what is known as House Bill 70 (HB 70), which exempts various types of crypto assets from securities laws. The bill was originally passed by Wyoming’s House of Representatives last month on February 20. It is now headed to Governor Matt Mead for signature.
According to public records, it passed by a vote of 27–3, with no senators abstaining. This final vote, which was expected to occur last week, was held up at the last minute for further discussion. Nevertheless, lawmakers completed work on legislation to exempt cryptocurrencies from state money transmission laws. They also approved the use of blockchain-based records for corporations.
Through this legislation, lawmakers hope to establish carve-out space for tech developers involved in the creation of what are known as “utility tokens.” The exemption would be directed at these utility tokens, which are not marketed or promoted as investments, and are able to be exchanged for goods and services.
The first of its kind, HB 70 provides legal guidelines on how certain types of cryptographic tokens are accounted for. And in a similar development, HB 19, a Bitcoin-friendly bill, is also steadily making its way through the Wyoming legislature. Also unanimously passed in the House, it exempts cryptocurrencies from the state’s money transmission laws.
Wyoming’s History of Setting Precedence
Wyoming is a state known for its rugged individualism with the desire to achieve “first mover advantage” on a number of key legislation. It is often dubbed the “Equality State,” the first state to grant women voting rights and the first state to elect a female governor.
With respect to business and commerce, it originated the Limited Liability Company (“LLC”) in 1977. Today, nearly two-thirds of businesses formed throughout the U.S. choose the LLC corporate entity format. LLCs formed in the state of Wyoming are on par with better-known Nevada and Delaware corporations in offering stellar asset protection.
A Wyoming native and former Wall Streeter, Caitlin Long, the co-founder of the Wyoming Blockchain Coalition and former chairman and president of enterprise blockchain company Symbiont, has been an enthusiastic champion of this blockchain legislation.
Long said in an email response to Bitcoin Magazine: “HB 70 is one of five blockchain bills supported by the Wyoming Blockchain Coalition, and four are already in the Governor’s inbox (the fifth is likely to pass tomorrow). The Governor has three days to sign the bills, and most of them take effect immediately after he signs. All five are designed to attract software companies to move to Wyoming, as well as to attract businesses to register in Wyoming even if they don’t move there.”
According to Long, HB 70, coined the utility token bill, represents the first time in the world that an elected body has recognized utility tokens as a distinct asset class that is neither a security nor money. She said that while the bill gives the industry a friendly state in which to base their operations, it does not resolve the federal regulatory questions for utility token issuers. Regardless, she said it can help set precedence in litigation and influence federal policy.
Long said that two of the other five bills are designed to be cryptocurrency-friendly, exempting cryptocurrencies from both Wyoming’s money transmitter laws and property taxes. Wyoming, she explained, already has zero income taxes or franchise taxes, so these bills are quite friendly to crypto businesses and crypto owners who want to move to the state.
Finally, she pointed to the last two bills aimed at attracting more businesses to register in Wyoming, which ranks third behind Delaware and Nevada in the number of new business registrations. She concludeed: “The race is on to see which state, Wyoming or Delaware, will be the first to accept registrations in blockchain form. Game on, Delaware!”
This article originally appeared on Bitcoin Magazine.
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Author: Michael Scott