Wyoming Defines Cryptocurrency 'Utility Tokens' As New Asset Class

The U.S. has very contradictory and uncertain classifications of cryptocurrencies that differ between the federal agencies. For example, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), both have different opinions on what they consider the definition of “cryptocurrencies” to be.

The U.S. state of Wyoming is looking to be the first government agency to define cryptocurrency utility tokens as a new assets class.

As for the SEC, they have stated unequivocally that all the initial coin offering (ICOs) and tokens they have looked at are securities. In other words, the SEC has declared all unregistered ICOs as illegal because they are violating U.S. securities laws.

However, the CFTC considers crypto tokens as commodities.  Supporting this stance, a District Judge in New York, Judge Jack Weinstein, ruled last week that “Virtual Currencies can be regulated by the CFTC as a Commodity."

As the federal ‘securities or commodities’ war rages, the state of Wyoming is taking action by legislating a definition, among other things.

Since the beginning of the year, the state's legislature has passed five crypto-related bills one of these bills that provides for the definition of cryptos as a brand new assets class, that is, a commodity.

This definition is found in the “Utility Token Bill,” (House Bill 70) which was passed by the Wyoming State Senate on March 7. Over the weekend, Governor Matt Mead signed the bill into law.

Why The “Utility Token Bill”?

Before now, the state was a haven for crypto businesses like Coinbase and other exchanges, however the unfavourable state money transmission laws chased these businesses out of Wyoming. Already, with the new law passed, some are beginning to make their way back, including new businesses.

With the first step taken by the state of Wyoming, other   Federal agencies may consider this approach.

UK's Regulator Warns Against Fraudulent Firm Cloning Financial Giant TP ICAP

The UK’s financial regulator, the Financial Conduct Authority (FCA), has uncovered another allegedly fraudulent crypto-related scheme.

On Friday (May 24, 2019), the FCA revealed that a company called ICAP Crypto had been impersonating an established firm known as ICAP Europe Limited. ICAP Crypto reportedly attempted to lure unsuspecting investors into a potential scam involving cryptocurrencies.

Using Company Details Belonging to Legitimate Financial Firms

While ICAP Crypto’s management does not claim its services are regulated by the FCA, the allegedly fraudulent firm has been using the company details that belong to legitimate UK-registered financial service providers.

The FCA has warned that the potential scammers operating ICAP Crypto may be using the company license information of established firms in order to lure investors into investing into a fraudulent crypto scheme.

According to the FCA, ICAP Crypto has provided contact information which may be “mixed” with details that belong to TP ICAP, one of the largest global interdealer brokers. Moreover, the FCA cautioned users that ICAP Crypto has launched a website that is not licensed by the FCA to offer financial services.

No Details Regarding Crypto Services

There’s also no association between the management and services provided by TP ICAP and ICAP Crypto, the UK’s financial regulator clarified. Furthermore, the FCA’s investigation has revealed that ICAP Crypto appears to be offering various crypto-related services including a platform to launch initial coin offerings (ICOs).

Although ICAP Crypto seems to be offering several different cryptocurrency-related products, the FCA found that the allegedly fraudulent firm has not provided any specific details regarding its services.

ICAP Crypto’s management states that its services include “a sophisticated blend of engineering with experience to empower thousands of marketers to access markets around the world through the use of digital currency entirely outside the traditional financial system.” However, it remains unclear what type of services the company actually offers.

FCA Planning To Draft Comprehensive Crypto Regulations

In January 2019, the UK’s financial regulator called for increased regulatory oversight over the leading European nation’s cryptocurrency market. In order to create regulations for digital assets, the FCA launched a consultation which requested feedback regarding how to regulate crypto transactions.

The FCA had specifically asked for feedback on how to regulate crypto exchanges, digital asset payment processing services, wallet providers, and broker dealers offering crypto derivatives.