US State Lawmakers Pass Bill Exempting Tokens From Securities Laws

March 8, 2018

The elected lawmakers of Wyoming, both in the Senate and the House, have passed a bill to exempt tokens from securities laws when they are used as utilities and not promoted as investments.

Making this the first tokens specific legislation in the world, with a raft of other blockchain specific laws passed, including exemption from property taxes and exemptions from money transmitter laws.

They seem to have moved fairly quickly through the process, it all taking just about two months from bill proposal to a final vote on the matter. With only the governor now left to ceremonially sign them and immediately make them law.

There was little objection, with only three lawmakers voting against the tokens bill, but there were plenty of amendments through the process, including:

“A developer, seller or a person who facilitates the exchange of an open blockchain token, or the registered agent of the applicable person, shall electronically file a notice of intent with the secretary of state before the person shall qualify for an exemption.”

The notice however barely requires much information, needing simply a name and status as developer, seller or facilitator, with the information to be published online.

It is unclear at this stage what effect this law will have within and outside of the state considering federal law takes precedence and that federal law is being interpreted by the SEC as covering tokens.

However, that interpretation itself is now subject to a court ruling where they will decide whether the SEC is right or whether the lawyer that now acts as a representative for the tokens industry is right.

The Wyoming token bill might have persuasive power in those arguments, in addition to the forceful arguments the lawyer has already put forward.

America therefore might be at a crossroads of sorts as they decide what legal approach to take towards the most innovative technology of this century.

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