CHEYENNE – Wyoming's recent trip to the world of ledgers and digital cryptocurrency has earned him international advertising in business – from industry magazines to respected financial publications.
Although the state has not yet understood all the implications of loosening the regulations on blockchain and bitcoin, some say that the scale of technology seems lost to lawmakers.
Advocates of the push to deregulate blockchain technology in Wyoming suggest that it could attract large numbers of new high-tech companies to the state, ultimately
In 2015, state financial regulators ruled that the Wyoming Money Transmitters Act has banned virtual currency trading, making the state one of the few in the country to take a tough position on the issue.
During this past legislative session, however, the legislators have annulled this decision, hoping to establish a fertile economic scenario for blockchain c ompanies.
Thanks to the legislation, the cryptocurrency can now be freely exchanged in the state, the virtual currency is exempt from property taxes, companies can use blockchain technology to store company records and "the first coin offers" "they are legal.
Blockchain is a digital ledger that enables secure online transactions and is used in conjunction with virtual currencies like bitcoins, but is generally used in any area where Internet security is vital.
The Wyoming Blockchain Coalition led the deregulation effort of the sector this year, but often made it clear that no benefit was guaranteed, a sentiment echoed by economists and local business executives.
From January 1 to May 18, there were a total of 82 initial filings of limited liability companies with the terms "blockchain" "cryptography" and "currency" in their training names, according to the Secretary of State of Wyoming. Each initial filer of an LLC pays a commission of $ 100, which means that the state has received approximately $ 8,200 in filing fees LLC related to blockchain during this period, although the invoice specifically providing the creation of "Series LLC" does not entered into force until July 1.
In the same period, there were a total of 14,747 initial depositions of LLC at the office.
"This growth of LLC corresponds to the model of historical growth that we have seen in recent years in the Secretary of State Office," Will Dinneen, information and communication officer for the Office of the Secretary of State of Wyoming, declared by email.
Perhaps one of the most creative new companies using blockchain technology right now is BeefChain, founded eight months ago for
The company has already labeled around 1,500 head of cattle across five ranchs across the state using Radio Frequency ID tags that are now connected to a
Co-founder Rob Jennings said the decision of the state of deregulating technology was directly responsible for his decision to open a shop here.
The advantages of the blockchain are clearly delineated, but the risks of the technology are a little less explored.
Rep. Jared Olsen, R-Cheyenne, was one of the main proponents of the blockchain this year, but he too reported a "tremendous learning curve" when it came to understanding it
Critics also warn that passing similar laws too fast can lead to confusion later.
"What worried me about the legislative approach to the blockchain here seemed that many of those who made progress did not really understand what they were doing," said Casper attorney David Eckhardt, who he claimed to have worked on fraud cases involving cryptocurrency in other states in the past. "Of course, there is the potential for economic growth, with the LLC Series coming to the state and creating a store, but with this there is the potential for fraud, hack and illegal activities involving gregarious characters. "
Cryptocurrency has a base in the" dark web ", where criminals use it for anonymous online transactions. This could include anything from drugs to human trafficking. There have also been incidents of fraud in initial coin offerings, which is why regulation of the sector could be considered more important, since cryptocurrencies exist only online and are not supported by any government or central bank.
As more states see the potential risks associated with unregulated cryptocurrency, they are establishing guidelines and repressing the nefarious side of the industry.
For example, New York announced an investigation into 13 cryptocurrency exchanges a few months ago, only one of many recently repressed on certain types of such exchanges by the Justice Department and the Securities and Exchange Commission. The state was also one of the first to regulate cryptocurrency, requiring anyone who managed it to obtain a license and employ a compliance officer to meet capital reserve requirements.
Between 2011 and April 2018, security incidents involving blockchain saw over $ 2 billion in losses, according to a report published by Baimaohui.net.
Experts say that none of these concerns is a puzzle to explore new industries, but that the Legislature might consider upgrading laws in the future.
"Before leaving us the state becomes a" world leader "in the blockchain, we need legislators to work with experts to understand what safeguards should be put in place to keep it a useful practice," said Eckhardt.