Known more for its prairies, high rates of methamphetamine abuse, and electing Dick Cheney six times consecutively to its sole congressional district, Wyoming has been busy rebranding itself as one of the nation’s most accommodating crypto states. Having recently passed a number of bills welcoming cryptocurrencies, the state has, however, managed to raise eyebrows in Washington.
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Wyoming Capitalizing on the Crypto Craze
Governor Matt Mead recently signed five cryptocurrency bills, one of which seeks to define what a digital currency is. In the hope of attracting crypto investors, the bill exempts “utility tokens” from the state’s securities regulations. Crypto-friendly laws have successfully enticed a number of cryptocurrency companies to the state. Or at least, companies with “crypto” or “blockchain” in their names.
David Pope, Executive Director of the Wyoming Blockchain Coalition, stated:
“This is one of the most exciting things that I have seen in a decade as far as the possibilities. The more traction and the more ground we can gain toward Delaware, the better for the state of Wyoming.”
The state of Delaware is known for its flexible Limited Liability Companies laws. Pope claims that there has been a visible influx of crypto-related business entities migrating west.
Tyler Lindholm, a Republican member of the Wyoming House of Representatives, said that the state receives new crypto company registration applications every two to three days, pocketing over $30 million USD in filing fees.
Delaware, by comparison, dwarfs that figure by a factor of forty.
Supporters of Wyoming’s Maltese-style stance, however, anticipate significant payoffs over the long term. With laws that define utility tokens as assets and that exempt cryptocurrencies from state property taxes, Wyoming’s lawmakers have contorted a regulatory framework that is as nonsensical and internally contradictory as it is accommodating.
It would also appear to be at odds with federal regulations, so the extent to which it will find success in attracting crypto startups is questionable. The Cayman Islands, after all, are a lot closer to many Americans than Cheyenne.
Despite Federal Reservations, Wyoming Garners Support From North Dakota and New Hampshire
Federal regulatory bodies continue to grapple with how to handle cryptocurrencies, though the SEC has clearly indicated its distaste for ICOs and companies that cynically add “blockchain” to their name. Jeff Bandman, former financial technology consultant at the Commodity Futures Trading Commission (CFTC) has said:
“What Wyoming has tried to do is identify areas that are within the scope of state securities and financial-services law. I don’t think Wyoming is going to get in a fight with the SEC.”
Lindholm has invited SEC officials to the state to demonstrate how blockchain can revolutionize business. He also pointed out that if it comes to a “federal fight”, he is ready for it. He and his governor may need to be.
Officials from New Hampshire and North Dakota have weighed in with their support for Wyoming’s bold moves, and intend to usher in their own crypto-friendly regulations. And as Lindholm concedes:
“My legislation does tend to not align with federal bureaucracies very well, and it wouldn’t be the first time I got a letter from an agency at the federal level. If it comes down to a federal fight, I think it’s great for Wyoming to have partners.”
Watchers of this space may want to hold onto their hats. Wyoming – along with its two-to-three new tech companies a day – could be setting itself up for a reckoning it lacks the resources to handle.
Is Wyoming going to become the spark of a crypto revolution in the U.S. or is it acting with foolhardy disregard for its own residents, new and old? Share your views in the comments section below.
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