The Wyoming House of Representative passed two pro blockchain and cryptocurrency laws in a landmark; 60 to 0 vote, making it a blockchain friendly state for blockchain startups. Bitcoin miners are already setting mining shop taking advantage of the state’s cheap electricity, no income and franchise tax laws.
House bill HB 70 and HB 19 have been forwarded to the state senate for approval. HB 70 “the Utility Token Bill” defines crypto token as neither traditional fiat money nor securities bounded by SEC regulation; HB 19 will exempt digital currencies from the Wyoming Money Transmitter Act of 2003 passed before Bitcoin invention. If the two bills are approved and signed by the state’s governor, they will take effect on 1st July.
To qualify for as a utility token and the cryptocurrency exemption as classified in the two bills –a token must meet some set guidelines. The case will be similar to a recently announced ICO framework in Switzerland.
In Switzerland, Tokens are classified into three Payment ICOs, Utility ICOs, and Asset ICOs. According to the framework, Utility tokens will not be treated as securities if its purpose is to give access service or goods. If the Utility violates these terms, it will be seen as an investment and treated as a security in economic terms.
Utility token definition
HB 70 “the Utility Token Bill” defines digital tokens as neither traditional fiat money nor securities bounded by SEC regulation if:
- The token is not marketed as an investment opportunity,
- The token is exchangeable for goods or services.
- No existing repurchase agreement or agreement to find buyers for the token.
Bitcoin Bill definition
The bill if passed will exempt cryptocurrencies from the 2003 Wyoming Money Transmitter Act and a 2015 Wyoming Division of Banking interpretation of that stated cryptocurrency exchanges could not work in the state. This led to one of world largest crypto exchanges to suspend operation in the state indefinitely.
The bill shall not apply to:
- Banks, loan, building credit unions and savings associations
- Electronic transfer of government benefits
- Buying, selling, issuing, or taking custody of cryptocurrencies to send to another place within or outside the United States
Other Bills awaiting approval
The blockchain filings bill, HB 101 seeks to amend Wyoming’s Business Corporations Act to allow companies to join the Distributed Ledger technology and Blockchain to store records, shareholder voting and offer inter-office communication. The bill is in the second reading in the House of Representatives.
The Series LLC bill, HB 126 has also passed the first reading in the House of Representatives. The bill if approved and moves to the Senate will be a step to decentralized protocols and offer for a compartmentalized asset.
SF 111 referred to as crypto property tax exemption bill already passed by the House and currently awaiting deliberation.
The fight continues
The two passed bills will have to face the Senate to be considered as official Acts. However, if the bills pass the Senate, the federal regulation and the SEC Howey Test could still regard the acts void.