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The five senior state officials in Wyoming, including Governor Mark Gordon, pose for a photo after being sworn in the office on Monday, January 7, 2019, in the state of Capitol Hill in Cheyenne. From left to right are the state treasurer Curt Meier, the public education superintendent Jillian Balow, Wyoming head judge Michael Davis, governor. & Nbsp; Gordon, Auditor Kristi Racines and Secretary of State Ed Buchanan. (AP Photo / Mead Gruver)RELEASE
In a significant move for the progress and legitimacy of cryptocurrencies and blockchain activities in the United States, Wyoming has introduced a bill that aims to clarify the legal position of digital assets, as well as offering the custody of digital assets through banks rather than financial institutions.
The bill offers three classifications of digital resources; digital titles, digital goods and, above all, virtual currencies that provide cryptocurrencies with the same treatment of money within the state.
These classifications are not new, but instead are applied to digital resources to provide clarification on their position in the law. This classification of virtual resources is crucial for the progress of cryptocurrencies that still operate predominantly in a regulatory gray area in the United States.
From a custody perspective, the law states that Wyoming can authorize banks to opt for an enhanced supervision regime for digital asset custody, designed to meet the ESA requirements for "qualified custodians" of digital assets.
The advancement of custody for cryptocurrencies in Wyoming is also remarkable, as happens through a bank, but the bank itself would not accept deposits of digital assets – these would be "assets under management" rather than bank deposits.
So, with a bank at the helm, rather than a trust company, it can operate in all 50 states. It is also known that the SEC prefers a bank to a trust company to be a qualified depository bank for digital assets.
The same legal status of money
What the Bill is getting with its classification of digital assets is that virtual currencies will have the same legal status as money under commercial law. Money has "super-negotiable" rules under Article 9 of the Uniform Commercial Code (UCC) and Wyoming would give the same virtual currencies.
This classification is very advantageous for coin-lending companies such as UCC 9-332 (a) states: "A money collector withdraws money from a security interest unless the transferee colludes with the debtor in violation of the rights of the protected party. "Which means that as long as the transferee does not collude to avoid the privilege, Bitcoin transfers are free and clear.
Furthermore, it means that Bitcoin has a legal status without the involvement of an intermediary, so the law reflects the peer-to-peer nature of & nbsp; these cryptocurrencies & nbsp; without requiring the involvement of an intermediary.
Without the intermediary, there is no debtor / creditor relationship and the owners of virtual currencies will have therefore recognized their cryptocurrency property rights.
Within the bill exist & nbsp; these three other classifications: first, digital titles, which have the same treatment as non-certified securities within the CDU. secondly, digital consumer tokens that are part of the same treatment as general intangible assets within the CDU.
Wyoming Senator Tara Nethercott and Senator Ogden Driskill look at the blockchain bill.Caitlin Long
Finally, virtual currencies which are offered the same treatment as money.
The importance of these classifications is that they offer legal status to digital tokens, something that has not yet been offered by any state. Companies such as Fidelity, Coinbase, Bakkt, Kraken, SALT Lending, etc. They are all at legal risk because nobody knows for sure how a judge in litigation or bankruptcy will classify digital resources in the absence of clear laws.
The preservation of Wyoming's digital assets
The new bill will also authorize banks to opt for a strengthened supervisory regime for the custody of digital assets. This will be a service and, as stated above, banks will not accept digital deposits, but, on the contrary, would provide similar custodial services to services provided by State Street, Bank of New York & amp; JP Morgan for titles.
The securities custody industry has 114 billion billion assets under administration and there are more and more problems on the blockchain with companies like Fidelity Investments entering this business, even Bakkt, with its futures exchange.
However, in Wyoming, being a bank, not a trust company, offering this service, it can operate throughout the country and makes the SEC much happier; one reason is that banks have clear liquidation provisions in the event of insolvency – while the trust companies do not.
The bill also sees Wyoming accepting custody as a deposit. This means that customers do not have to be forced into a debtor / creditor relationship. It is important because large asset managers are required to hold assets with an independent "qualified depository". The new bill should instead offer customers the option of retaining property rights in digital resources instead of being forced to surrender them to their counterparts.
Better for Wyoming
The move by Wyoming to introduce this bill, and subsequently become an attractive option for businesses and users of cryptocurrency, is not only a progress for the new advanced technology but also for the state itself.
Wyoming is making a game for the nascent sector of digital goods custody to be located in Wyoming in the same way that South Dakota and Utah have done for credit card companies and industrial loan companies with the their passage of laws in the years & 70s & 80s.
This bill is the beginning of the creation of a regulatory home in the field of digital goods conservation in Wyoming, and is already beginning to see absorption. Characters like Cardano have already made their trip to Wyoming after Mark Gordon, 33rd governor of Wyoming, has praised the potential of Blockchain.
Caitlin Long, a volunteer and co-founder of the Wyoming Blockchain Coalition, who worked alongside some legislators and senators, including Wyoming State Representative Tyler Lindholm, Senator Ogden Driskill and Senator Tara Nethercott, to get this Bill through , explains why Wyoming is a good place for blockchain and crypto to get a point of legislative support in the United States.
"Wyoming took the opportunity to drive in this field last year, and realized it had just as many advantages in competing for this nascent industry like any other place – and much more," explained Long. "Blockchain is software, so it's global – a line of code does not care who wrote it or where it was written in. As Joe Lubin said when he spoke at WyoHackathon last fall, there's no reason so the next Google can not be here in Wyoming. "
"But there is also a cultural aspect." Wyoming is known for "robust individualism" – it has embraced self-sovereignty and personal responsibility long before Blockchain came in. Not by chance one of the 39; University of Wyoming is "Bucking the System Since 1886."
Caitlin Long, co-founder of the Wyoming Blockchain Coalition depicted in the Wyoming State Representative, Tyler LindholmCaitlin Long
For Senator Nethercott, Wyoming's "agility and reactivity" makes it a suitable state to pioneer cryptocurrency, a sector that thrives to move quickly and adapt accordingly.
"Wyoming is an innovative and forward-looking state open to the business world, we are excited about what the future holds and we want to continue taking the initiative with the future of the business.The time is now to provide the path to blockchain and cryptocurrency and Wyoming has the agility and responsiveness to the needs of these industries to respond accordingly to the growing landscapes and adaptation of cryptocurrency, "the senator said in Forbes.
So while many outside of Wyoming will see this as a positive factor for cryptocurrency, those who helped get the bill are looking at how the state can benefit. This is in itself a good case study that goes beyond areas, states, even countries, which decide to establish a friendly legal route for blockchain and cryptocurrency.
"There is a reasonable expectation that this bill along with others will have a significant financial impact on the State of Wyoming and reinforce the image of Wyoming as a pioneer in new legislation and innovative ideas in the blockchain / cryptocurrency space. all taken together make Wyoming the Silicon Valley of Blockchain and the nation's Cryptocurrency and, arguably, the world, "explains Senator Driskill.
Long goes on to say that even if this bill is a precedent, it is defined in such a way that the risk is mostly mitigated by adhering to already recognized laws, requirements and classifications.
"This is new." The bill addresses this risk by requiring the custodian to meet the SEC level requirements – including a surprise annual audit – which means that the Wyoming Banking Commissioner can work alongside the SEC; In most cases, the institution would be regulated by both the Wyoming Banking Commissioner and the SEC, "added Long.
Advantages for the state and technology
There are some countries, like Malta, Switzerland and Estonia, to name a few, which have seen a vacuum becoming a leader in the nascent technology of Blockchain, and Wyoming is trying to do the same with this new legal framework.
It is not just a push for the state, it should be implemented successfully, but a push for the global state and the legitimacy of cryptocurrency and blockchain.
Long continues to explain:
"Every single blockchain company is operating with a certain degree of legal risk, whether it's a start-up or Fidelity Investments because the law in this sector has not achieved what is happening in the real world," said Long .
"If you listen to the SEC's comments, the SEC has been quite specific about the problems the industry faces before it is ready for institutional investors, ETFs to be approved, etc. Wyoming has responded by proposing to solve these problems, and- it's important to do it in a way that matches how technology actually works. "
"For example, several lawyers have proposed to put the blockchain in the legal regime of securities, in which investors own most of the securities indirectly through an intermediary and have a debtor / creditor relationship with the intermediary instead of a right to Direct ownership in securities If another state promulgated such laws, it would have been a disaster for the blockchain industry – Wyoming paved the way here. "
A need for legal certainty
The Wyoming bill is something that many companies and cryptocurrency users have lost too much time. In most cases it was a case of recovery for legislators and legislators who prefer to sit down and play "wait and see the game".
However, there is hope that more states and countries will start to propose laws and regulations that establish earlier rules that there may be changes in the air and a more solid and clear legal framework can be built around nascent technology and its associated digital resources.
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The five senior state officials in Wyoming, including Governor Mark Gordon, pose for a photo after being sworn in the office on Monday, January 7, 2019, in the state of Capitol Hill in Cheyenne. From left to right there are the state treasurer Curt Meier, the public education superintendent Jillian Balow, the head of the Wyoming justice Michael Davis, the governor Gordon, the auditor Kristi Racines and the secretary of state Ed Buchanan. (AP Photo / Mead Gruver)RELEASE
In a significant move for the advancement and legitimacy of cryptocurrencies and blockchain activities in the United States, Wyoming introduced a bill that aims to clarify the legal position of digital assets, as well as offering the custody of digital assets through banks rather than financial institutions.
The bill offers three classifications of digital resources; digital titles, digital goods and, above all, virtual currencies that provide cryptocurrencies with the same treatment of money within the state.
These classifications are not new, but instead are applied to digital resources to provide clarification on their position in the law. This classification of virtual resources is crucial for the progress of cryptocurrencies that still operate predominantly in a regulatory gray area in the United States.
From a custody perspective, the law states that Wyoming can authorize banks to opt for an enhanced supervision regime for digital asset custody, designed to meet the ESA requirements for "qualified custodians" of digital assets.
Also the advancement of custody for cryptocurrencies in Wyoming is notable, as it happens through a bank, but the bank itself would not accept deposits of digital assets – these would be "assets under administration" rather than bank deposits.
So, with a bank at the helm, rather than a trust company, it can operate in all 50 states. It is also known that the SEC prefers a bank to a trust company to be a qualified depository bank for digital assets.
The same legal status of money
What the Bill is getting with its classification of digital assets is that virtual currencies will have the same legal status as money under commercial law. Money has "super-negotiable" rules under Article 9 of the Uniform Commercial Code (UCC) and Wyoming would give the same virtual currencies.
This classification is very advantageous for coin-lending companies such as UCC 9-332 (a) states: "A money collector withdraws money from a security interest unless the transferee colludes with the debtor in violation of the rights of the protected party. "Which means that as long as the transferee does not collude to avoid the privilege, Bitcoin transfers are free and clear.
Furthermore, it means that Bitcoin has legal status without the involvement of an intermediary, so the law reflects the peer-to-peer nature of these cryptocurrencies without requiring the involvement of an intermediary.
Without the intermediary, there is no debtor / creditor relationship and the owners of virtual currencies will have therefore recognized their cryptocurrency property rights.
Within the bill there are these three other classifications: first, digital titles, which have the same treatment as non-certified titles in the CDU. secondly, digital consumer tokens that are part of the same treatment as general intangible assets within the CDU.
Wyoming Senator Tara Nethercott and Senator Ogden Driskill look at the blockchain bill.Caitlin Long
Finally, virtual currencies which are offered the same treatment as money.
The importance of these classifications is that they offer legal status to digital tokens, something that has not yet been offered by any state. Companies such as Fidelity, Coinbase, Bakkt, Kraken, SALT Lending, etc. They are all at legal risk because nobody knows for sure how a judge in litigation or bankruptcy will classify digital resources in the absence of clear laws.
The preservation of Wyoming's digital assets
The new bill will also authorize banks to opt for a strengthened supervisory regime for the custody of digital assets. This will be a service and, as stated above, banks will not accept digital deposits, but instead would provide custodial services similar to the services provided by State Street, Bank of New York and JP Morgan for securities.
The securities custody industry has 114 billion billion assets under administration and there are more and more problems on the blockchain with companies like Fidelity Investments entering this business, even Bakkt, with its futures exchange.
However, in Wyoming, being a bank, not a trust company, offering this service, it can operate throughout the country and makes the SEC much happier; one reason is that banks have clear liquidation provisions in the event of insolvency – while the trust companies do not.
The bill also sees Wyoming accepting custody as a deposit. This means that customers do not have to be forced into a debtor / creditor relationship. It is important because large asset managers are required to hold assets with an independent "qualified depository". The new bill should instead offer customers the option of retaining property rights in digital resources instead of being forced to surrender them to their counterparts.
Better for Wyoming
The move by Wyoming to introduce this bill, and subsequently become an attractive option for businesses and users of cryptocurrency, is not only a progress for the new advanced technology but also for the state itself.
Wyoming is making a game for the nascent sector of digital goods custody to be located in Wyoming in the same way that South Dakota and Utah have done for credit card companies and industrial loan companies with the their passage of laws in the years & 70s & 80s.
This bill is the beginning of the creation of a regulatory home in the field of digital goods conservation in Wyoming, and is already beginning to see absorption. Some like Cardano have already moved to Wyoming after Mark Gordon, 33rd Governor of Wyoming, has praised the potential of Blockchain.
Caitlin Long, a volunteer and co-founder of the Wyoming Blockchain Coalition, who worked alongside some legislators and senators, including Wyoming's state representative, Tyler Lindholm, Senator Ogden Driskill and Senator Tara Nethercott, to pass this project, explains why Wyoming is a good place for blockchain and crypto to get a legislative point of support in the United States.
"Wyoming took the opportunity to drive in this field last year, and realized it had just as many advantages in competing for this nascent industry like any other place – and much more," explained Long. "Blockchain is software, so it's global – a line of code does not care who wrote it or where it was written in. As Joe Lubin said when he spoke at WyoHackathon last fall, there's no reason so the next Google can not be here in Wyoming ".
"But there is also a cultural aspect." Wyoming is known for "robust individualism" – it has embraced self-sovereignty and personal responsibility long before Blockchain came in. Not by chance one of the 39; University of Wyoming is "Bucking the System Since 1886."
Caitlin Long, co-founder of the Wyoming Blockchain Coalition depicted in the Wyoming State Representative, Tyler LindholmCaitlin Long
For Senator Nethercott, it is the "agility and reactivity" of Wyoming that makes it a suitable state to lead the way in cryptocurrency, a sector that thrives quickly and adapts accordingly.
"Wyoming is an innovative and forward looking state, open to business, we are excited about what the future holds and we want to continue driving the future of the business. The time is now to provide the path to blockchain and cryptocurrency and Wyoming has the 39, agility and the ability to respond to the needs of these industries to respond accordingly to the growing landscapes and adaptation of cryptocurrency, "said the senator in Forbes.
So while many outside of Wyoming will see this as a positive factor for cryptocurrency, those who helped get the bill are looking at how the state can benefit. This is in itself a good case study that goes beyond areas, states, even countries, which decide to establish a friendly legal route for blockchain and cryptocurrency.
"There is a reasonable expectation that this bill along with others will have a significant financial impact on the State of Wyoming and reinforce the image of Wyoming as a pioneer in new legislation and innovative ideas in the blockchain / cryptocurrency space. Wyoming, the Silicon Valley of Blockchain and the nation's Cryptocurrency and probably the world, "explains Senator Driskill.
Long goes on to say that even if this bill is a precedent, it is defined in such a way that the risk is mostly mitigated by adhering to already recognized laws, requirements and classifications.
"This is new." The bill addresses this risk by requiring the custodian to meet the SEC level requirements – including a surprise annual audit – which means that the Wyoming Banking Commissioner can work alongside the SEC; In most cases, the institution would be regulated by both the Wyoming Banking Commissioner and the SEC, "added Long.
Advantages for the state and technology
There are some countries, like Malta, Switzerland and Estonia, to name a few, which have seen a vacuum becoming a leader in the nascent technology of Blockchain, and Wyoming is trying to do the same with this new legal framework.
It is not just a push for the state, it should be implemented successfully, but a push for the global state and the legitimacy of cryptocurrency and blockchain.
Long continues to explain:
"Every single blockchain company is operating with a certain degree of legal risk, whether it's a start-up or Fidelity Investments because the law in this sector has not achieved what is happening in the real world," said Long .
"If you listen to the SEC's comments, the SEC has been quite specific about the problems the industry faces before it is ready for institutional investors, ETFs to be approved, etc. Wyoming has responded by proposing to solve these problems, and- it's important to do it in a way that matches how technology actually works. "
"For example, several lawyers have proposed to put the blockchain in the legal regime of securities, in which investors own most of the securities indirectly through an intermediary and have a debtor / creditor relationship with the intermediary instead of a right to Direct ownership in securities If another state promulgated such laws, it would have been a disaster for the blockchain industry – Wyoming paved the way here. "
A need for legal certainty
The Wyoming bill is something that many companies and cryptocurrency users have lost too much time. In most cases it was a case of recovery for legislators and legislators who prefer to sit down and play "wait and see the game".
However, there is hope that more states and countries will start to propose laws and regulations that establish earlier rules that there may be changes in the air and a more solid and clear legal framework can be built around nascent technology and its associated digital resources.
