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.

Chinese Court Rules Bitcoin Is Legally Protected Virtual Property

The Hangzhou Internet Court, in China, has recently ruled bitcoin is seen as virtual property in the country, and as such is legally protected.

The ruling came in a case in which the plaintiff, Mr. Wu, sued the Shanghai Technology Company, which allegedly operated the FXBTC cryptocurrency exchange on Taobao, a leading Chinese online marketplace, and sold bitcoin back in 2013.

Wu reportedly bought 2.675 BTC for 20,000 yuan, about $2,900, back in 2013 from the exchange. In 2017, during the cryptocurrency market’s bull run that saw bitcoin hit a near $20,000 all-time high, the buyer wanted to access the funds, but found out FXBTC closed and could no longer get to the BTC.

According to Beijing News, the plaintiff claims the Shanghai Technology Company didn’t warn it was closing the platform nor gave him a chance to access the funds afterwards. The store likely shut down as between 2013 and 2017, the Chinese government made it illegal to trade cryptocurrencies, which in turn forced Taobao to stop vendors from selling cryptos on its platform.

While the plaintiff failed to prove Shanghai Tech was the vendor that sold him the bitcoin and lost the case, the court did determine bitcoin is legally protected virtual property.

According to Dovey Wan, this was seen as a bullish signal in China and chatter on Weibo, a Chinese microblogging platform similar to Twitter, seemed to point to this as the reason behind bitcoin’s recent price surge.

According to CryptoCompare data, BTC rose 4.8% in the last 24-hour period, and is currently trading at $10,300. Earlier today, bitcoin jumped from a $9,400 low to as much as $10,500 before facing a small correction.

Notably, this isn’t the first time a Chinese court defends bitcoin. As CryptoGlobe covered late last year, an arbitration court ruled bitcoin should be protected as property by law, and clarified at the time Chinese law doesn’t forbid owning or transferring bitcoin. Earlier this year, a prominent Chinese lawyer argued owning and occasionally trading bitcoin is legal in the country.

On Twitter, Wan clarified that while holding bitcoin as private property is legal, trading the cryptocurrency “in a systematic way” isn’t.