Wyoming is rapidly developing a presence as the most crypto-friendly state in the US with the recent unanimous passing of a bill that exempts some utility tokens from securities regulations.
House Bill 70, labeled the “utility token bill”, was passed by the Wyoming State Senate on the 7th of March, and now heads to Governor Matt Mead for approval.
Publicly available information from Legiscan shows that the bill, designed to exempt specific cryptocurrencies from state money transmission laws, moved swiftly through the Senate, passing the third reading at Wyoming’s House of Representatives on the 19th of February.
The bill, which is the first of its kind to legally define the way in which specific types of crypto tokens are treated by regulatory bodies, excludes “developers or sellers” of tokens from securities laws under the caveat that they meet certain conditions.
In order to meet these requirements, the token must not be offered as an investment and must be offered as a vehicle for exchange as a utility token:
“A person who develops, sells or facilitates the exchange of an open blockchain token is not subject to specified securities and money transmission laws… (provided that) the purpose of the token is for a consumptive purpose, which shall only be exchangeable for, or provided for the receipt of, goods, services or content, including rights of access to goods, services or content; and the developer or seller of the token did not sell the token to the initial buyer as a financial investment”
The move is at odds with the current regulatory stance in the US, with the SEC recently issuing subpoenas to a number of initial coin offerings that are at risk of violating US securities law.
While certain parties are excluded from the bill, including credit unions and banks, Wyoming appears to be positioning itself as the most progressive US state regarding cryptocurrency regulation.
In addition to house bill 70, another bill, Senate Bill 111, was introduced last week that could potentially see “virtual currencies” completely exempt from being taxed as property. Interestingly, virtual currencies are defined in the bill as any store of value, medium of exchange or unit of account that is specifically not recognized as legal tender by the federal government. If passed, this prospective bill would concrete Wyoming’s position as the cryptocurrency capital of America.
Cover Photo by Dmitry Sovyak on Unsplash