Wyoming passes bill exempting some tokens from securities laws

Bill HB 70 states that a person who develops sells or facilitates the exchange of an open blockchain token is not subject to specified securities and money transmission laws

What has happened?

The US state of Wyoming has passed a historic bill that exempts cryptocurrency tokens from securities laws, as long they are positioned as utilities, not investments.

What does this mean?

The first explicit token legislation, HB 70, dubbed the "utility token" bill, was first introduced about two months ago and now needs to be signed into law by Governor Matt Mead.

The bill states that a person who develops sells or facilitates the exchange of an open blockchain token is not subject to specified securities and money transmission laws.

The bill states:

"A developer or seller of an open blockchain token shall not be deemed the issuer of a security… if 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… [and] the developer or seller of the token did not sell the token to the initial buyer as a financial investment."

The bill also states that, bar certain exceptions, issuers and exchanges offering utility tokens "shall not be deemed a broker-dealer or a person who otherwise deals in securities".

Several other blockchain bills are also progressing through the legislative process in Wyoming.

HB 19 was signed by Governor Matt Mead earlier this week and exempts cryptocurrencies from the state's money transmissions laws.

HB 101, dubbed "the blockchain record bill", authorises: "corporations to use electronic networks or databases for the creation or maintenance of corporate records, the use of a data address to identify a corporation's shareholder; corporations to accept shareholder votes if signed by a network signature that corresponds to a data address."

It also specifies requirements for use of electronic networks or databases.

Finally, Senate Bill 111, which exempts virtual currencies from state property taxation, is also going through readings in the Wyoming Senate, as well as HB 126, which deals with limited liability companies.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

Contacts
Gregory Lisa
Partner
Washington D.C.
Languages English
Topics Blockchain
Countries United States

 

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