{"id":190387,"date":"2021-02-27T16:47:00","date_gmt":"2021-02-27T13:47:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/while-washington-dithers-wyoming-and-other-us-states-mine-for-crypto-gold\/"},"modified":"2021-02-27T16:47:00","modified_gmt":"2021-02-27T13:47:00","slug":"while-washington-dithers-wyoming-and-other-us-states-mine-for-crypto-gold","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/while-washington-dithers-wyoming-and-other-us-states-mine-for-crypto-gold\/","title":{"rendered":"# While Washington dithers, Wyoming and other US states mine for crypto gold"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3f3ecba36d8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3f3ecba36d8\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/while-washington-dithers-wyoming-and-other-us-states-mine-for-crypto-gold\/#A_complex_fabric\" >A complex fabric<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/while-washington-dithers-wyoming-and-other-us-states-mine-for-crypto-gold\/#An_accident_waiting_to_happen\" >An accident waiting to happen?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/while-washington-dithers-wyoming-and-other-us-states-mine-for-crypto-gold\/#Innovator_or_loophole\" >Innovator or loophole?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/while-washington-dithers-wyoming-and-other-us-states-mine-for-crypto-gold\/#Will_others_join_in\" >Will others join in?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/while-washington-dithers-wyoming-and-other-us-states-mine-for-crypto-gold\/#Is_Wyoming_good_for_BTC_adoption\" >Is Wyoming good for BTC adoption?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># While Washington dithers, Wyoming and other US states mine for crypto gold <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDIvNTdmYzkxZGUtOTgzYi00YTY5LTk0ZWYtNzBiMTgwNzZiZWU2LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>The United States is divided politically these days into red states and blue states, and increasingly, it seems to be fracturing into cryptocurrency-friendly and crypto-wary locales, too. On Feb. 21, it was revealed that San Francisco-based Ripple Labs had registered as a Wyoming business. Wyoming is arguably the most blockchain and cryptocurrency-welcoming state in the United States.\u00a0<\/p>\n<p>Meanwhile, several days later, New York State\u2019s attorney <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ag.ny.gov\/press-release\/2021\/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal#:~:text=The%20OAG's%20investigation%20found%20that,tether%2C%20contrary%20to%20its%20representations.\">announced<\/a> a settlement of the office\u2019s long-standing investigation into crypto trading platform Bitfinex for illegal activities. As a result, Bitfinex and affiliated Tether must pay $18.5 million for damages to the state of New York and submit to periodic reporting of their reserves.<\/p>\n<p>Wyoming and New York \u2014 poles apart on the crypto regulatory spectrum \u2014 were both making industry headlines in the same week in other words. The irony wasn\u2019t lost on Timothy Massad, former chairman of the U.S. Commodity Futures Trading Commission and now a senior fellow at Harvard University at Kennedy School, who told Cointelegraph: <\/p>\n<blockquote><p>\u201cFederal regulation of crypto assets is like swiss cheese \u2014 full of holes \u2014 and that has meant a smorgasbord at the state level, with Wyoming actively luring crypto businesses and the New York attorney general bringing aggressive enforcement actions as we saw this week with Tether and Bitfinex.\u201d<\/p><\/blockquote>\n<p>Whether this \u201csmorgasbord\u201d is a good thing is a matter of some debate. Crypto havens like Wyoming can be centers of innovation, pushing a potentially revolutionary <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> further forward, as Wyoming\u2019s recently elected U.S. Senator Cynthia Lummis emphasized this week in a Chamber of Digital Commerce <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=g_4zOHpEyyM\">panel discussion<\/a> with Miami\u2019s Mayor Francis Suarez, another crypto enthusiast.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_complex_fabric\"><\/span>A complex fabric<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>But it also leads to regulatory uncertainty that gives entrepreneurs a case of hypertension. As Stephen McKeon, an associate professor of finance at the University of Oregon, told Cointelegraph: \u201cOur regulatory system is a complex fabric of multiple agencies at both the state and federal level.\u201d He further emphasized that \u201cthey need to coordinate on the topic of crypto assets because this asset class doesn\u2019t map cleanly to the existing regulatory structure.\u201d<\/p>\n<p>Asked if, from a business standpoint, Ripple and others were making a smart business move registering in crypto-warm states like Wyoming with a higher degree of regulatory certainty and freedom \u2014 as well as lower taxes \u2014 McKeon added: \u201cBusinesses strive to reduce regulatory uncertainty. If moving to Wyoming helps to achieve that objective, then it\u2019s a smart move.\u201d<\/p>\n<p>Others could follow Ripple. Zachary Kelman, managing partner at Kelman Law, told Cointelegraph: \u201cMany crypto projects fled New York after the introduction of the onerous BitLicense back in 2015. I expect more projects to relocate in Wyoming, as well as other crypto-friendly states like New Hampshire.\u201d <\/p>\n<p>Wyoming created a stir in 2019 when its legislature authorized the chartering of special purpose depository institutions, or SPDIs, that can receive both deposits and custody assets, including cryptocurrency. The state\u2019s banking division itself <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/wyomingbankingdivision.wyo.gov\/home\/areas-of-regulation\/laws-and-regulation\/special-purpose-depository-institution\">acknowledged<\/a> that \u201cit is likely that many SPDIs will focus heavily on digital assets, such as virtual currencies, digital securities and utility tokens,\u201d though they could also deal with traditional assets. SPDIs can\u2019t make loans like traditional banks, however.<\/p>\n<p>Kraken Bank was the first business to receive a Wyoming SPDI bank charter in September 2020, followed by Avanti Bank and Trust in October, and there are \u201cthree more [SPDIs] in the pipeline\u201d said Lummis at the Chamber of Digital Commerce\u2019s Feb. 25 event. Avanti founder and CEO Caitlin Long had earlier <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/CaitlinLong_\/status\/1194025012078022657?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1194025012078022657%7Ctwgr%5E%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fcoingape.com%2Fwyoming-loophole-crypto-transactions-without-bitlicense%2F\">suggested<\/a> that Wyoming\u2019s SPDIs potentially were \u201ca solution to the #BitLicense problem\u201d faced by crypto companies because \u201cNew York law exempts national banks from the BitLicense.\u201d <\/p>\n<p>But even though the Wyoming SPDI\u2019s are state-chartered institutions, not national banks, \u201cfederal law protects parity of national banks and state-chartered banks,\u201d continued Long, and following that logic, she concluded that SPDIs represented \u201ca passport into some 42 U.S. states without the need for additional state [crypto] licenses.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"An_accident_waiting_to_happen\"><\/span>An accident waiting to happen?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Not all are enthralled by Wyoming\u2019s new special-purpose banks, though. The Bank Policy Institute suggested that Wyoming\u2019s SPDIs could be an \u201caccident waiting to h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>en.\u201d The BPI <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/bpi.com\/beware-the-kraken\/#_ftn3\">noted<\/a> in September that Kraken was \u201cthe first digital asset company in U.S. history to receive a bank charter recognized under federal and state law\u201d but warned that its business model \u201cis inherently unstable under stress\u201d because the new bank is funded by uninsured, demandable retail deposits \u201cand relies on a pool of assets such as corporate bonds, munis and longer-term Treasuries to fund redemptions under stress.\u201d<\/p>\n<p>David Kinitsky, CEO of Kraken Bank, in a conversation with Cointelegraph, said that he believes the BPI blog post \u201ccomes from a lobbyist group funded by, and working on behalf of, the world\u2019s biggest banks\u201d and rests \u201con a slew of faulty assumptions,\u201d adding further:<\/p>\n<blockquote><p>\u201c[It\u2019s] comical and hypocritical that they think their fractional reserve model along with its total reliance on asset exposure and interest rate environment is somehow less risky than a full reserve custodian bank that won\u2019t do any lending and has a diverse set of adjacent revenue streams.\u201d<\/p><\/blockquote>\n<p>Others have opined that innovation centers like Wyoming were merely filling the void left by the federal government, which has yet to take a coherent stance vis-a-vis the burgeoning crypto market. Benjamin Sauter, a lawyer at Kobre &amp; Kim LLP, told Cointelegraph: \u201cWyoming is showing that individual states can play a meaningful role in crafting a coherent legal framework for the crypto\/blockchain industry \u2014 particularly when it comes to state taxation as well as commercial and some banking issues.\u201d <\/p>\n<p>By comparison, according to him, the U.S. federal government \u201chasn\u2019t really made an effort to create such a framework, and this has led to a lot of regulatory inefficiencies and general confusion.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Innovator_or_loophole\"><\/span>Innovator or loophole?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>So, what about the notion that Wyoming merely created a means for its new banks to lure firms and investors based in more regulated states like New York? Kelman told Cointelegraph on the matter: \u201cMany institutions operate entities all over the world, not just the United States. New York has jurisdiction over New Yorkers \u2014 but not any company related to a company that has had operations there.\u201d <\/p>\n<p>\u201cWyoming can and is becoming a center for crypto business and innovation,\u201d Kinitsky told Cointelegraph, adding: \u201cCertainly, there are ready similar examples within financial services like the credit card industry in South Dakota and ILC banks in Utah\u2026.SPDI banks have similar frameworks for being able to operate across the country and indeed internationally.\u201d<\/p>\n<p>McKeon agreed that Wyoming was following the South Dakota playbook: \u201cSouth Dakota created favorable legislation for banks around interest rates and fees in the 1980s and now has one of the highest concentrations of bank assets in the U.S.,\u201d adding further: <\/p>\n<blockquote><p>\u201cBy creating an environment that allows crypto projects to operate with a higher degree of regulatory certainty and freedom, Wyoming is likely to attract similar relocation within crypto.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Will_others_join_in\"><\/span>Will others join in?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Of course, other states could follow Wyoming\u2019s lead. Kelman said: \u201cI also expect larger states, like Florida, to follow suit with more crypto-friendly guidance, especially after Miami Mayor Francis Suarez\u2019s overtures to the crypto community.\u201d However, he further stressed that \u201cgiven Wyoming\u2019s small size and relative obscurity, I don\u2019t know if it will remain a haven for an entire industry in the way Delaware has been for incorporations and corporate governance.\u201d<\/p>\n<p>As reported, Mayor Suarez is looking to develop some of \u201cthe most progressive crypto laws\u201d and proposing within his jurisdiction innovations like paying city workers\u2019 wages in Bitcoin (BTC) and purchasing BTC for the municipality\u2019s treasury. Senator Lummis applauded the mayor\u2019s initiatives at the Chamber of Digital Commerce\u2019s panel, inviting him to \u201clook at Wyoming\u2019s legislative framework as a template and then build on it\u201d by developing new Bitcoin \u201ccomponents,\u201d including a pension plan for Miami workers that includes Bitcoin \u2014 something Suarez is looking into. <\/p>\n<p>Multiple innovative centers like Miami and Wyoming, among others, could advance technological progress generally, she suggested. Suarez, for his part, said: \u201cOne of the things that we want to do is imitate Wyoming\u2019s very successful integration of crypto into their community.\u201d<\/p>\n<p>Meanwhile, Avanti\u2019s Long remains an ardent booster for her state: \u201cWhy should crypto companies redomicile to Wyoming?\u201d she asked rhetorically on Feb. 21 following the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> that Ripple Labs had registered as a Wyoming limited liability company, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/CaitlinLong_\/status\/1363554598091255808\">adding<\/a>: <\/p>\n<blockquote><p>\u201cNo state corp tax, no franchise tax, crypto exempt from property &amp; sales tax, our commercial laws clarify crypto legal status, crypto-friendly banks opening soon, access to crypto-open gov\/legislators\/US senator \u2014 all laws open-source.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Is_Wyoming_good_for_BTC_adoption\"><\/span>Is Wyoming good for BTC adoption?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>What exactly do these tech-friendly states and cities mean for cryptocurrency adoption? Sauter was cautiously optimistic: \u201cIt\u2019s possible that Wyoming\u2019s efforts will have some trickle-up effects, should the federal government ever get its act together.\u201d He stated further that there is also a major risk as businesses may be \u201clulled into a false sense of security and potentially conflating Wyoming\u2019s regime for compliance at the federal level.\u201d<\/p>\n<p>Kinitsky told Cointelegraph that the convergence between crypto and banking, as is happening in Wyoming, \u201cportends an important step toward mainstream adoption,\u201d while McKeon added that crypto users \u201care primarily concerned with access to products and features. Better products translate to increased adoption.\u201d Therefore, if Wyoming-type legislation enables crypto projects \u201cto provide new and desirable features by mitigating regulatory risk for the providers, then it will be a positive force for general public adoption.\u201d<\/p>\n<p>Many, though, still seem to be treading water until the federal government acts to provide some legislative\/regulatory structure to the nascent blockchain and cryptocurrency industry. According to Sauter, \u201cas great and encouraging Wyoming\u2019s recent actions are, there is only so much one state can do.\u201d Massad also told Cointelegraph: <\/p>\n<blockquote><p>\u201cThis regulatory confusion creates higher costs and uncertainty. There\u2019s still plenty of money and talent in this country flowing into crypto innovation, but we need greater regulatory clarity to ensure investor protection, financial stability and responsible innovation.\u201d<\/p><\/blockquote>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/while-washington-dithers-wyoming-and-other-us-states-mine-for-crypto-gold\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# While Washington dithers, Wyoming and other US states mine for crypto gold &#8221; The United States is divided politically these days into red states and blue states, and increasingly, it seems to be fracturing into cryptocurrency-friendly and crypto-wary locales, too. On Feb. 21, it was revealed that San Francisco-based Ripple Labs had registered as&#8230;<\/p>\n","protected":false},"author":1,"featured_media":190388,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDIvNTdmYzkxZGUtOTgzYi00YTY5LTk0ZWYtNzBiMTgwNzZiZWU2LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74894,75540,75034,3885,70934,67874,73438],"class_list":["post-190387","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-blockchain","tag-kraken","tag-ripple","tag-new-york","tag-regulation","tag-united-states","tag-wyoming"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/190387","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=190387"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/190387\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/190388"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=190387"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=190387"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=190387"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}