These days, the United States is politically divided into red and blue states, and it appears to be increasingly infiltrating into cautious cryptocurrency-friendly territories. On February 21, it became known that Ripple Labs, headquartered in San Francisco, was registered as a company in Wyoming. Wyoming is without a doubt the most attractive case for blockchain and cryptocurrency networks in the United States.
Meanwhile, a few days later, the New York State Attorney General announced a settlement agreement with a long-running investigation into illegal activities of the Bitfinex cryptocurrency trading platform. As a result, Bitfinex and its subsidiaries will have to pay $ 18.5 million in damages to the State of New York and file periodic reports on their holdings.
In other words, Wyoming and New York – the opposite poles of the cryptocurrency regulatory spectrum – made headlines in one week. The irony hasn’t escaped Timothy Massad, the former chair of the US Commodity Futures Trading Commission and now a Harvard Senior Fellow at Kennedy College, who told Cointelegraph:
“The federal cryptocurrency regulation is like Swiss cheese – riddled with loopholes – and that means this is a modern buffet where Wyoming is actively participating in cryptocurrencies and New York state attorneys are taking strict enforcement action, as we saw this week with Tether Bitfinex.”
Whether this buffet is a good point of debate. Cryptoports like Wyoming could be centers of innovation, pushing potentially disruptive technology forward, as highlighted by recently elected U.S. Senator Cynthia Lamis of Wyoming in a panel discussion with the Digital Chamber of Commerce with Miami Mayor Francis Suarez, another cryptocurrency enthusiast.
But it also leads to the organizational uncertainty that can make entrepreneurs sick with high stress. As Stephen McCune, assistant professor of economics at the University of Oregon, told Cointelegraph, “Our regulatory system consists of many agencies at the state and federal levels.” He also stressed that they “need to coordinate the issuance of cryptocurrencies because this asset class is not exclusively linked to the current organizational structure.”
When asked whether Ripple and other smart business moves have taken from a business point of view, and whether they have been recruiting into crypto hot nations like Wyoming with higher levels of regulatory security and freedom, plus lower fees, McKeon added: Companies are looking to reduce Regulation requirements. suspicion. If moving to Wyoming helps with this goal, this is a smart move. ”
Others may have followed Ripple. Zachary Kelman, managing partner at Kelman Law, told Cointelegraph: “Many crypto projects left New York after the onerous BitLicense rollout in 2015. I expect more projects to move to Wyoming as well as other cryptocurrency friendly countries like New York and Hampshire.
Wyoming sparked riots in 2019 when the legislature authorized the creation of private depository institutions, or SPDIs, that can accept both deposits and trustees, including cryptocurrencies. The government banking arm itself has acknowledged that “many social investment development institutions are likely to focus heavily on digital assets such as virtual currencies, digital securities, and community funds,” although they may also work with traditional assets. However, SPDIs cannot provide loans like traditional banks.
Kraken Bank was the first company to receive the SPDI charter in Wyoming in September 2020, followed by Avanti Bank and Trust in October, and there are “three more [SPDI] in progress,” Lummis said at the February 25 Digital Chamber of Commerce meeting. … Event. The Avanti Foundation and CEO Caitlin Long previously expected Wyoming’s SPDI to be the “solution to the #BitLicense problem” facing cryptocurrencies, as “New York law exempts national banks from BitLicense.”
But even though SPDI in Wyoming is a state-mandated institution and not a national bank, “federal law protects parity between national and state-owned banks,” Long continued, and from this reasoning, she concluded that SPDI is a “passport to some.” 42 US states Without additional government [encryption] licenses. ”
Accident waiting in the wings?
Not everyone is happy with the new dedicated banks in Wyoming. The Banking Policy Institute suggested that the SPDI in Wyoming may be “an accident waiting in the wings”.