You may opt-out by. Some attorneys have called this. 6.59. indicating that, under federal law, a virtual currency user is not a money transmitter and is therefore not subject to the registration, reporting, and recordkeeping regulations for money services businesses. Chapter 217, the "Seller of Checks" law, does not currently give the Department the authority to regulate virtual currency. From Telegraphs to Steamships to Virtual Currency Money transmitters began operating in the late 19th century, with the telegram used to move money from sender to recipient. And, for digital assets specifically, last year Wyoming exempted them from property taxes. Two limited purpose trust companies that engage in the virtual currency business have been chartered: Gemini Trust Company ... the Wyoming Division of Banking has permitted cryptocurrency and digital asset companies to apply for a Wyoming special purpose depository institution ("SPDI") charter. Institutional investors can expect that Wyoming-based qualified custodians will actually be SOLVENT for three basic reasons: In a nutshell, Wyoming’s digital asset custodians will simply be service providers to institutional investors, who will still own their digital assets. It's all about its legal regime respecting DIRECT ownership of digital assets, whether by individuals or institutional investors. This cryptocurrency is usually at the top of experts' and users' lists of recommendations for investments in the digital world. And I finally hope to finish the book I started writing about the intersection of Wall Street and blockchain. As for federal tax relief, Wyoming can’t fix the IRS’s terrible tax treatment of digital assets (yes, spending bitcoin on a cup of coffee triggers federal capital gains tax). Sign In. Wyoming Money Transmitters Act - 2018.pdf. Wyoming would become the first state to completely exempt virtual currency from its money transmitter law if the bill is adopted. Wyoming Money Transmitters Act - 2018.pdf. Many people and regulatory agencies are unsure of what to do with crypto, stalling its adoption. North Carolina : Money Transmitter License, 181412: North Carolina Commissioner of Banks 316 W. Edenton Street Raleigh, NC 27603. Wyoming is the first state to clarify the treatment of digital assets under existing commercial laws (e.g., the Uniform Commercial Code (UCC)), and this is probably the most important of Wyoming’s new blockchain laws. In short, there are very good tax reasons why, as they say, “the billionaires are pushing out the millionaires” in Jackson Hole, Wyoming, and why so many tax-motivated relocations to Wyoming are happening. Payments for these changes are made through the NMLS system as well. This Bill is seeking to amend the Wyoming Money Transmitter Act in order to. (xxii) "Virtual currency" means any type of digital representation of value that: (A) Is used as a medium of exchange, unit of account or store of value; and (B) Is not recognized as legal tender by the United States government. California is Leading the Future of America’s Crypto Economy. For digital assets within the US, I’m pretty confident that will end up being Wyoming. The Alabama Monetary Transmission Act– also known as Senate Bill (SB) 173– was signed by Alabama governor Kay Ivey in May 2017. Wyoming’s commercial law for digital assets is WAY too detailed to analyze here, but I’ll highlight my favorite four parts of it. Wyoming’s money transmitter law exempts crypto-to-crypto transactions, effective as of last year. 0001] These laws enable innovation and creativity, and are meant to bring capital, jobs and revenue into Wyoming. I want e-mail alerts, updates, and offers and agree to the CryptoCurrencyNews. At least three other states that I know of have either enacted, or are in process of enacting, Wyoming’s same money transmitter exemption for crypto-to-crypto transactions. "effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution". According to current laws, a money transmitter license may be required depending on how the business handles fiat currency in its business model. All Money Transmitter and Currency Exchangers must report their authorized delegate additions, deletions, and changes through the NMLS system. Forty-nine of the fifty American states enact their own version of a Money Transmitters Act. Basically, there are none at the state level—in most cases! But there are. Well, Wyoming just solved that by setting up its own business court (“Chancery Court”) this year, details of which are here. More than a dozen other US states and Congress are now following Wyoming’s lead by enacting our bills (usually just one or two of Wyoming’s bills). In the US, federal taxes are distinct from state taxes and federal taxes apply to every American—but Wyoming can (and does) offer what’s probably the friendliest state tax regime. In sum, Wyoming is already the "Delaware of digital asset law," a reference to Delaware’s lead in corporate law. Law and technology are discrete systems. Capital ultimately flows to where it’s treated best. A fiat or virtual currency exchange, as long as the consumer is strictly buying or selling the currency and the consumer does not have the ability to send fiat currency to another consumer. Every Delaware-registered business should be asking your tax adviser how much you pay in Delaware franchise taxes every year and then calculate how much you’d save by redomiciling to Wyoming (hint hint!). Tennessee guidance is similar to that of Texas. Third, it makes security interests in digital assets “possessory security interests,” which means Wyoming law applies as long as the assets are, under this law, “located in” Wyoming—and the law makes it very easy to “locate” the digital assets in Wyoming. States like Wyoming believe that excluding cryptocurrency trading from money transmission laws creates a conducive environment for virtual currency businesses. W.S. WHAT DOES WYOMING’S NEW COMMERCIAL LAW FOR DIGITAL ASSETS MEAN? (xxii) "Virtual currency" means any type of digital representation of value that: (A) Is used as a medium of exchange, unit of account or store of value; and (B) Is not recognized as legal tender by the United States government. (Remember, rehypothecation is a felony in Wyoming…in New York, it wins bankers big bonuses. by applying the very same rules that apply to money. CAPITAL, JOBS and REVENUE. SWIFT is testing its own blockchain and the results are going “extremely well”, Copyright © 2021 | #170 - 422 Richards Street Vancouver, BC, Canada V6B 2Z4 | 1.800.340.9767, Copyright © 2021 | Terms of Use | Privacy Policy | DMCA | Disclaimer| Authors, #170 - 422 Richards Street Vancouver, BC, Canada V6B 2Z4 | 1.800.340.9767. It’s possible—though admittedly an edge case—that a judge will enforce a prior lien against bitcoin that you, an innocent purchaser, did not know existed. But no other state is likely to catch up to Wyoming—it’s a very tall order for any legislature to enact 13 bills on a single topic in a compressed time frame, especially when another state has already claimed first-mover advantage. , and many speculate this “surprise” lien risk is one of the reasons why new bitcoins trade at a premium over older bitcoins in OTC markets. creditors and where the firms frequently trade with customers' assets behind the scenes. Wyoming instilled in me deep-seeded philosophies that have a strong cultural overlap with those of blockchain (i.e., what’s mine is mine and what’s yours is yours, good fences make good neighbors, rugged individualism, clear property rights and low taxes). Wyoming’s new law regarding certificated shares just took effect this week, and WOW, Missouri was lightning fast in already copying it! All Rights Reserved, This is a BETA experience. Here are the top highlights regarding Wyoming’s newest blockchain laws: Why would a staunch supporter of #NotYourKeysNotYourCoins, as I am, help set up a digital asset custodian—especially when I acknowledge all third parties can be security holes? Addressing the issue at a Montana gathering in 1996 he said "I’m not talking about getting rid of anybody here, I've got 5 children myself”. To my knowledge that hasn’t actually happened yet, but as bitcoin lending markets grow and as more merchants accept bitcoin (which may be covered by an all-assets lien over the merchant’s inventory), the issue will inevitably arise. These laws are essentially the plumbing that makes every financial transaction possible, and most importantly, they provide rules for what happens when a transaction doesn’t go smoothly—ensuring parties have certainty regarding their rights and duties. Utah. However, cryptocurrency companies may require a license if their business engages with fiat currency exchange. This model is distinct from both traditional securities custodians and crypto exchanges, where investors are usually. One of the most significant developments in Wyoming has been Bill 111, a measure that exempts digital currencies from property taxation statewide. So, what is a blockchain? North Carolina added virtual currency companies to its Money Transmitter Act in 2016. A bank license is superior to a trust company license for digital asset custody, for many reasons. On the opposite side, proponents say such exemptions open the door for money laundering and other illegal financial transactions. Wyoming has now enacted a total of 13 blockchain-enabling laws, making it the only US state to provide a comprehensive, welcoming legal framework that enables blockchain technology to flourish, both for individuals and companies. Bitcoin Suddenly Soars Toward $60,000 Price—Roaring Past $1 Trillion As Fear Grips Tech Stocks, BitGo’s Newest Charter Deepens Its Regulatory Arsenal, Argo Blockchain Joins The Texas Bitcoin Mining Rush, Amid Massive Bitcoin Bull Run, Data Reveals Serious Coinbase Price Warning, Twitter CEO Jack Dorsey Sparks Huge Bidding War As $400 Million NFT Crypto Mania Spirals Out Of Control, 5 Digits To 8 Digits: How Moonrock Capital’s Polkadot Thesis Played Out In 2021. Wyoming surety bond leader, Surety One, Inc. specializes in the bonding needs financial institutions, money transmitters and virtual currency intermediaries. It’s broadly reciprocal with fintech sandboxes both in the US and globally; a new type of state-chartered depository institution to provide basic banking services to blockchain and other businesses. PDF | On Aug 1, 2017, Christina A. Olson and others published Telehealth | Find, read and cite all the research you need on ResearchGate Transmitting virtual currencies, regardless of whether the company deals in fiat, qualifies as money … North Carolina added virtual currency companies to its Money Transmitter Act in 2016. During the Vietnam War era, Turner's business prospered; it had "virtual monopolies in Savannah, Macon, Columbus, ... Turner has put $125M of his own money into the foundation and has set aside $6M per year to address population growth rates. Wyoming Money Transmitters Act - 2018.pdf. You may not rely on it and you must seek a qualified adviser to advise you about how you can take advantage of the great opportunities Wyoming offers! Wyoming invented the LLC in 1977 and this year it revamped its trust and statutory foundation laws to be the best in the US. HOW CAN INDIVIDUALS BENEFIT FROM THE WYOMING BLOCKCHAIN LAWS? in Congress. Wyoming is already the "Delaware of digital asset law," a reference to Delaware’s lead in corporate law. Yes, a lot. Here’s the issue that may solve. And, now, these institutional investors will be able to directly own the digital assets they custody at solvent Wyoming custodians. blockchain technology, both for individuals and companies. Learn more! Wyoming, the first state to adopt a new law, has enacted a “direct approach” which expands the free and clear negotiability rules to all virtual currency, regardless of how the virtual currency is held. These new custodians won't be like traditional securities custodians, because for a Wyoming-based custodian investors will still DIRECTLY own their digital assets under custody as a BAILMENT, which means they retain direct ownership while merely giving up control (much like valet parking). Special thanks to Steve Lupien of the Digital Asset Trade Association for his strong, intrepid support on the ground. Well, Wyoming law provides a solution—ask your attorney about the myriad ways to get your digital assets subject to Wyoming law for two years! To my knowledge that hasn’t actually happened yet, but as bitcoin lending markets grow and as more merchants accept bitcoin (which may be covered by an all-assets lien over the merchant’s inventory), the issue will inevitably arise. However, several states have used money transmissions laws to regulate the exchange of virtual currency. 2017-102 (H.B. HB 19: The “Virtual Currency Exemption” exempts cryptocurrency from the Wyoming Money Transmitter Act, which regulates the licensure of professionals and businesses involved with electronic money transfers or transmittals. The U.S. state of Wyoming is the first elected to body to define utility tokens as a new form of property, and property is generally the purview of state law. is probably the most important of Wyoming’s new blockchain laws. Developing A Risk Assessment Guidance (pdf) This guide serves as a starting point to assist our Money Services licensees in developing a risk assessment of their own. Applying for an MTL in all of the 49 states that require a license can be done by following the three phases outlined below. Wyoming has now enacted a total of 13 blockchain-enabling laws, making it the only US state to provide a comprehensive, welcoming legal framework that enables blockchain technology to flourish, both for individuals and companies. Its LLC laws have very strong privacy protections, and Wyoming is frequently cited as the tax-friendliest state in the United States (more on that below). Displaying Wyoming Money Transmitters Act - 2018.pdf. The crypto space has come a long way over the past few years, and so has the blockchain solution space. Learn more! All gains and losses from mining agreements remain with the utility’s shareholders, thereby completely insulating retail electric customers from these transactions. It’s an opt-in regime available to any Wyoming bank, including its new special-purpose depository institutions. For everyone else, it’s pretty easy to take advantage of Wyoming’s blockchain laws. located around Wyoming that provide potential capital gains tax deferral—again, talk to your tax adviser. Well, not in Wyoming (#probably!—check with your lawyer!) 40-22-102(a) by creating a new paragraph (xxii) and 40-22-104(a)(iv), (v) and by creating a new paragraph (vi) are amended to read: 40-22-102. One important thing to note is the results of the discussion of this document: 60 Ayes, 0 Nays, 0 Excused, 0 Absent and 0 Conflicts. It’s really that simple. In 1871, Western Union introduced the first commercial money transfer service in an effort to expand its telegraph business. Strictly commercial or business purposes. … 3 The term “virtual currency” commonly used by other governmental bodies can be used interchangeably with the term “digital currency” throughout this guidance document. Resources. Notably, FIN-2013-G001 indicates that a mere “user” of convertible virtual currency is not a regulated money transmitter, and FIN-2014-R001 clarifies that “mining,” “creating,” or “manufacturing” a virtual currency are activities a user may undertake without becoming a money transmitter. They will not be counterparties that are de facto hedge funds in a relationship that is too often “heads I win, tails I win.” Fiduciaries of institutional investors will, I believe, appreciate this and migrate to Wyoming-based digital asset custodians. The Pennsylvania Department of Banking and Securities (“DoBS”) just released Guidance declaring that virtual currency, “including Bitcoin,” is not considered “money” under the Pennsylvania Money Transmission Business Licensing Law, otherwise known as the Money Transmitter Act (“MTA”). It was already a felony in Wyoming anyway, per a 1986 Supreme Court case (, In a nutshell, Wyoming’s digital asset custodians will simply be service providers to institutional investors, who will still own their digital assets. HOW CAN BUSINESSES BENEFIT FROM WYOMING’S BLOCKCHAIN LAWS? One objection I’ve heard from attorneys is that Wyoming doesn’t have a special court for resolving complex business disputes like Delaware does. Here’s the issue that may solve. Virtual Currency Business Activity Company License, 0000017. Wyoming often comes up #1 on surveys of the best states for tax purposes. (For this reason alone, I suspect most coin lending and prime brokerage businesses will want to domicile in Wyoming.) Businesses have 3 ways to benefit and they’re not mutually exclusive. But no other state is likely to catch up to Wyoming—it’s a very tall order for any legislature to enact 13 bills on a single topic in a compressed time frame, especially when another state has already claimed first-mover advantage. Each state separately licenses and regulates money transmitters that engage in money transmission to their residents. Biggest thanks go to Chris Land, legislative draftsman extraordinaire and unsung hero of this massive undertaking—a true expert in commercial law and digital asset law. HB 19 would have amended the Wyoming Money Transmitter Act to provide an exemption for virtual currency but died in the state senate. Learn more! One objection I’ve heard from attorneys is that Wyoming doesn’t have a special court for resolving complex business disputes like Delaware does. Chapter 217, the "Seller of Checks" law, does not currently give the Department the authority to regulate virtual currency. In order to apply for an MTL in a state, the entity must be “qualified” to conduct business in the state, a process that must be confirmed before submitting the MTL application.