USA – WYOMING Trends and Developments Contributed by: Bob Cornish, Law Offices of Robert V. Cornish, Jr., PC
Trends and Developments in Cryptocurrency Laws in Wyoming The digital assets industry worldwide considers Wyo - ming the prime domicile for corporate activities. Since 2018, Wyoming’s legislators have taken a proactive approach to attract participants in the digital assets industry to Wyoming. The initial pieces of legislation have evolved to include new corporate structures and, most recently, Wyoming’s own stablecoin. Those counselling those in the digital assets industry need to be acutely aware that while Wyoming’s leg - islation is favourable, the status of federal legislation remains in flux. While the Trump administration has undertaken favourable treatment and receptiveness to the digital assets industry, that does not necessar - ily mean that federal securities and commodities laws may not apply. Keeping in mind the federal system that is the backbone of the United States, the most optimal strategy for conducting business in digital assets is to maintain all corporate structures, banking relationships and even customers within the borders of Wyoming as much as possible. Notwithstanding, one point regarding Wyoming cor - porate structures versus those of other states is of importance to those outside of the United States, namely that Wyoming, unlike Delaware, does not have an “implied consent” rule that imposes jurisdic - tion upon officers of Wyoming LLCs and other enti - ties. However, like Delaware, Wyoming now has a Chancery Court specifically for the resolution of com - mercial disputes. Given that submission of matters to Chancery Court must be mutual, it is advised that parties agree to Chancery Court jurisdiction in opera - tive documentation. A brief summary of the structures and provisions of Wyoming’s laws is provided below: • The Wyoming legislature has recognised that blockchain businesses in general have difficulty opening and maintaining traditional banking rela - tionships due to FDIC and OCC inclusion of block - chain ventures in the same buckets as firearms and cannabis. Wyoming will now permit corporate entities to charter “special purpose depository institutions”, which will perform all traditional
bank functions except for lending. With the lend - ing exclusion, these institutions will be under the primary supervision of the Wyoming Banking Com - mission and not the federal government. These banks will be required to maintain at least 100% of reserves against deposits as well as (i) USD5 mil - lion of capital, (ii) three years of operating expenses and (iii) private insurance against theft, cybercrime and other wrongful acts. As has been widely reported, federal banking regulators in the United States did not look at all favourably upon SPDIs up until very recently, preventing them from gain - ing access to the “fed window”, which is a neces - sary component of any bank. Some SPDIs have undertaken what one would call “correspondent” relationships with other banks, allowing them to piggyback on those institutions’ electronic access to the broader US banking system. These develop - ments have been the impetus for the creation of Wyoming’s stablecoin, FRNT, in 2025. The SPDI legislation can be summarised as follows: (a) Wyoming banks seeking to custody digital assets (including newly created Special Pur - pose Depository Institutions (SPDIs) under recently enacted law) must apply to the WBC at least 60 days prior to custody activity for approval to do so. Banks must provide the WBC with (i) an outline of the custodial services to be rendered, (ii) the identity of the auditor who has been retained for custody audit, (iii) a review of the financial condition of the bank to demonstrate that custody of digital assets will not affect the soundness of the bank, and (iv) an operational risk mitigation plan. In addition, banks must have annual testing for cyberse - curity and penetration of security media, along with AML/KYC procedures. Where a bank seeks to utilise outsourced providers or ser - vices for certain aspects of custodial services, that bank must demonstrate that it has per - formed a reasonable level of due diligence on the provider and the services it seeks to render. (b) Banks may custody digital assets of clients and others. In the case of a bank client with an account at the bank, the digital assets are to be held in the name of that client in line with com - mon precepts of account segregation under Rule 206-4 (2) of the Investment Advisers Act
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