According to a recent announcement, the San Francisco-based digital currency exchange platform Coinbase has renewed its Wyoming money transmitter license, meaning state residents can use the company's products again. The exchange believes this renewal "will spur innovation and economic activity for individuals, families and communities across the state."
The company's homecoming to the Cowboy State is informed by HB19, which amended the Money Transmitter Act to provide a virtual currency exemption, as part of Wyoming's 2018 legislative session. Coinbase worked with majority floor leader of the House of Representatives David Miller, Senator Eli Bebout, members of Governor Matt Mead's Blockchain Task Force, and their legislative colleagues to arrive at a solution, represented by HB19, that is amenable to both the state and the exchange.
With the renewed license, Wyoming customers should be able to access their accounts, including any funds stored since Coinbase suspended service in Wyoming back in June 2015. However, the company noted that state residents should contact its support team if access has not been restored.
In its suspension notice from 2015, the company maintained that regulatory policies from the Wyoming Division of Banking, which oversees the state's cryptocurrency regulation, rendered "continued Coinbase operations there impractical."
Apparently, under the previous iteration of the Money Transmitter Act, a hosted wallet service such as Coinbase needed to maintain fiat reserves "equal to the aggregate face value of all funds held on behalf of customers," which would have been too expensive and inefficient for the company. This interpretation of the law led the exchange to disable Wyomingites' accounts, causing uproar in the state's crypto community as various individuals thought their money had been stolen.
Now, because the "double reserve" aspect of the law no longer applies to cryptocurrency companies, Coinbase indicated that regulated entities like itself can operate in Wyoming as they do in almost every other state. Although there have been no announcements as of press, other crypto companies are likely to join the exchange in establishing (or re-establishing) a presence in the Equality State.
In its announcement, Coinbase also said it was "encouraged" by the state's "positive transition for Wyoming residents" regarding the use of cryptocurrency technology. Part of the exchange's mission is to advocate for crypto across the US (like in North Carolina) and around the world, so the company "will continue collaborating with legislators and regulators" to make this goal a reality.
Aside from the amendment to the Money Transmitter Act, the Wyoming legislature passed a round-up of blockchain- and cryptocurrency-friendly legislation during its 2018 session. To recap:
- HB70 allows for certain digital assets to be exempt from the state's securities laws;
- HB101 modifies the state's Business Corporations Act to allow blockchain-based records storage;
- HB126, although not explicitly related to blockchain or cryptocurrency technology, may help parties develop decentralized governance protocols or minimize the potential legal risks of token ownership in the state; and
- SF111 creates a state property tax exemption for cryptocurrencies.