The world of cryptocurrency world has morphed into a whole new ecosystem within the past couple of years, and even as the industry surges ahead daily regarding developments and technological advancements, there is little development on the regulatory front.
Generally, the two federal agencies that serve in the U.S, that is The SEC and CFTC primarily serve the American cryptocurrency market. Unfortunately, both agencies have differing views on the matter, despite working towards a similar goal of cryptocurrency regulation.
While the SEC defines ICOs and cryptocurrencies as “securities,” and therefore illegal unless registered as a security, the CFTC differs and defines cryptocurrencies as “commodities.” Jack Weinstein, Judge of a district court in New York, resonated with the CFTC and ruled that “virtual currencies can be regulated by the CFTC as a commodity.”
However, moving forward from this legislative confusion is the US state of Wyoming. A total of five bills relating to cryptocurrency and blockchain technology have been passed over the past several weeks. While each bill is equally important, one standout law, in particular, has defined cryptocurrencies as a different, new asset class in the jurisdiction of Wyoming.
The Wyoming House Bill 70
With the passing of Bill 70, officials from the state of Wyoming have set a strong example for the remainder of the U.S. Labeled the “Utility Token Bill,” the Wyoming State Senate passed Wyoming’s House Bill 70 on March 7. The bill was signed into law by Governor Matt Mead recently.
According to the bill, specific cryptocurrencies are exempt from state money transmission laws and is unique as it legally defines the cryptocurrency tokens and their regulatory outlook by the governing bodies. To meet the requirements of the Utility Token Bill, the token must not be offered as a means of investments, but instead serve as a means of “exchange.”
“The state of Wyoming is the first elected body in the world to define a utility token as a new type of asset class different from a security or commodity,” stated Caitlin Long, co-founder of the Wyoming Blockchain Coalition. Long went on to say:
“This has been a hot topic in Washington D.C. recently, as the SEC considers cryptocurrencies to be securities, FinCEN says they’re generally money, and the CFTC views them as commodities. Now, however, you have a state coming out and defining utility tokens as a new form of property, and property is generally the purview of state law.”
The passing of House Bill 70 could be uniquely groundbreaking as this could be the first step to getting the U.S. Congress to clarify how cryptocurrencies should be regulated. As the first state to define what a utility token is, it is certainly exciting that Wyoming is setting an example of how this could become a standard under federal law.
What do you think of the Utility Token Bill? Does this pave the way forward for cryptocurrencies? Let us know in the comments.