State Blockchain and Cryptocurrency Laws and Regulations

Alabama Blockchain and Crypto Laws

Currently, Alabama isn't a crypto-friendly state. In July 2021, the Alabama Securities Commission sent a "show case" order to BlockFi, a New Jersey-based company that sells crypto-related investment products. Ultimately, the Alabama authorities gave BlockFi about a month to explain why it should be allowed to sell its packages — which the ASC considers financial securities — within Alabama without registering.

Alabama's government website also has a section entitled "Be Cautious of the Crypto Investment Craze."

Alaska Blockchain and Crypto Laws

Alaskans love cryptocurrency — and so far, the state government isn't getting in anybody's way.

Notably, Alaskans rank high among early crypto adopters. In 2017, Overstock.com published a report revealing that Alaskans are the most likely to pay with Bitcoin on the e-commerce platform. Additionally, Bitcoin ATMs are scattered throughout the Anchorage area, where people can buy and sell tokens, and the state's legislative body considered a law that would allow for blockchain voting.

Arizona Blockchain and Crypto Laws

Notoriously business-friendly Arizona is known for the "five Cs": citrus, climate, cattle, cotton, and copper — and state legislators are eager to add one more: cryptocurrency. Currently, the state house is considering a bill that would establish a pro-innovation blockchain task force. If ratified, it could make Arizona one of the country's "crypto capitals," alongside Texas and Wyoming. Moreover, a section on the state government's website addressing virtual currency explicitly states that digital currencies are "subject to minimal regulation."

However, "minimal regulation" isn't the same as "no regulation." If you're operating a blockchain operation in the state, it may be a good idea to consult with an Arizona cryptocurrency lawyer. to make sure you comply with all applicable regulations and registration requirements.

Arkansas Blockchain and Crypto Laws

In 2019, Arkansas enacted HB1944, which defined blockchain distributed ledger technology, blockchain technology, and smart contracts. The law says that a signature, record, or contract secured through blockchain technology is an acceptable electronic form and therefore legal. HB1944 also provides that smart contracts are equivalent to traditional commercial contracts in Arkansas courts.

The University of Arkansas has made a significant investment in the future of blockchain by establishing The Center for Blockchain Excellence at the Sam M. Walton College of Business.

California Blockchain and Crypto Laws

California is a mixed bag when it comes to cryptocurrency and blockchain law. On the one hand, the state allows corporations to use blockchain technology to record information relating to issuing and transferring stocks. However, legislators also signed a law that makes it easier to regulate and tax cryptocurrencies and other digital financial assets.

But California is home to Silicon Valley, one of the country's tech hubs. As such, many blockchain and DeFi startups are based in the Golden State.

Colorado Blockchain and Crypto Laws

Colorado is relatively crypto-friendly. In 2019, they passed the Colorado Digital Token Act, which offers "limited exemptions from the securities registration and securities broker-dealer and salesperson licensing requirements." The key phrase is "limited exemptions," though. If you sell, trade, or are otherwise involved in a digital currency investment project, you may want to speak with a cryptocurrency lawyer about your specific registration requirements.

In May 2021, the state's governor, Jared Polis, floated the idea of exploring ways to allow for crypto tax payments. However, little has been mentioned since.

Connecticut Blockchain and Crypto Laws

Authorities in Connecticut treat cryptocurrencies like fiat cash, and entities involved or invested in the space need to follow state and federal registration regulations. However, most of the major trading platforms are open to Connecticut residents, and most area hedge funds, which feed into Wall Street, maintain digital currency positions.

Moreover, the Connecticut General Assembly has a blockchain working group whose goal is to "develop a master plan for fostering the expansion of the blockchain industry in the state and recommend policies and state investments to make Connecticut a leader in blockchain technology."

Delaware Blockchain and Crypto Laws

Delaware has a notoriously business-friendly environment, and The First State is holding to form when it comes to blockchain technology. Early on, Delaware passed several pro-blockchain laws that made it easier for corporations to adopt the technology. Additionally, authorities have hosted several industry symposiums to determine the best ways to leverage blockchains.

But it's not all smooth sailing, and certain types of traders and investors must meet rigorous registration standards.

District of Columbia Blockchain and Crypto Laws

Bitcoin and other cryptocurrencies qualify as money in the District of Columbia, which means crypto investors and businesses based in the district must acquire the requisite licenses and register with the necessary agencies. Otherwise, D.C. officials have been pretty quiet on the blockchain and crypto front.

Florida Blockchain and Crypto Laws

Florida ranks among the states that want to position itself as a blockchain business hub. In 2019, the Sunshine State formed a blockchain task force under the Florida Department of Financial Services to "develop a master plan for fostering the expansion of the blockchain industry in the state." Crypto-based businesses also enjoy support from the Florida Blockchain Business Association.

Georgia Blockchain and Crypto Laws

Crypto and blockchain businesses based in Georgia are subject to certain licensing and registration requirements. However, legislators are open to building the state's sector and are eager to work with crypto businesses looking to set up shop in the Empire State of the South.

Notably, Georgia is big on blockchain education. The Georgia House of Representatives approved a financial literacy curriculum for high school seniors that includes crypto lessons. Additionally, several state colleges and universities have established blockchain labs and faculties, including Georgia State University.

Hawaii Blockchain and Crypto Laws

Hawaii isn't crypto-friendly, and several major exchanges don't allow transactions originating from the state. Moreover, authorities have actively discouraged digital currency and blockchain businesses from operating in Hawaii by setting up several business barriers and hurdles.

Regardless of the state's anti-blockchain sentiments, over a dozen crypto-adjacent companies have set up shop in Hawaii. So, it's doable.

Idaho Blockchain and Crypto Laws

In 2021, Idaho passed a law meant to:

"Define terms, to provide for classification of digital assets as property and to provide application to the uniform commercial code, to provide for digital asset custodial services, to provide for jurisdiction of Idaho courts, and to establish the Idaho Utility Token Act."

What's the Idaho Utility Token Act? If passed, the law would allow individuals to create open blockchain utility tokens. All in all, Idaho welcomes blockchain businesses, but some registration requirements still apply.

Illinois Blockchain and Crypto Laws

Illinois isn't known for its business-friendly regulations, but state legislators warmed early to blockchain's potential. The Illinois Department of Innovation and Technology established a working group to "create more efficient, integrated and trusted state services, while providing a welcoming environment for the Blockchain community."

Additionally, lawmakers in the Illinois House unanimously passed HB3968, making it the second state to allow financial services to run on cryptocurrency. The Senate is now considering the language, but it's expected to pass. When it does, Illinois will become an attractive home base for certain cryptocurrency companies.

Authorities also prepared a business development report for the sector, which is a helpful read for anyone exploring the possibility of establishing a crypto or blockchain startup in Illinois.

Indiana Blockchain and Crypto Laws

As of this writing, Indiana has remained neutral on blockchain, and lawmakers aren't drafting or considering any new laws or regulations in the niche. The government does have a section dedicated to crypto investing, but it's highly cautionary. On the positive side, many Bitcoin ATMs are scattered throughout the state, and there don't appear to be any outwardly hostile forces creating obstacles for blockchain businesses.

Iowa Blockchain and Crypto Laws

In the spring of 2021, the Iowa House of Representatives passed House File 541, which recognizes the use of smart contracts and blockchain for financial transactions. Coindesk described the law as "leveling the field" for crypto and companies that use smart contracts. We agree, and it makes Iowa one of the more crypto-friendly jurisdictions in the United States.

Kansas Blockchain and Crypto Laws

Kansas legislators haven't enacted any blockchain or crypto-specific laws at the time of this writing. However, back in 2014, the Office of the State Bank Commissioners issued guidance on crypto as it relates to the Kansas Money Transmitter Act, but the document has since been removed.

The state House is also currently considering a tax law that could place burdens on businesses or individuals that require the use of a special token to purchase items on their platforms. However, it's still in the early stages, and there's nothing to report as of yet.

Notably, the University of Kansas has a blockchain lab called Block Chalk Jayhawk, and its stated mission is to "strive to make Lawrence the technology hub of the Midwest through the interdisciplinary research, education, and development of distributed ledger technologies at KU."

Kentucky Blockchain and Crypto Laws

In March of 2021, Kentucky lawmakers took the bold step of giving a tax break to crypto miners. The decision is part of an initiative to make the state a hub for energy-heavy businesses, including token mining. Because of the statute, Kentucky is considered one of the better states to start a crypto business.

Louisiana Blockchain and Crypto Laws

Louisiana is the New York of the south in that it has strict digital currency licensing standards. In 2020, legislators passed the Virtual Currency Business Act, which requires certain cryptocurrency operators to secure special licenses to conduct business in the state. The thin silver lining is that individuals and outfits that do less than $35,000 in trading or selling are exempt from the law.

Maine Blockchain and Crypto Laws

Maine has remained relatively mum on the question of blockchain and crypto legality. In 2017, a legislator proposed a working group to explore "using blockchain technology in conjunction with paper ballots in Maine elections" — but nothing seems to have come of it. In 2019, the Maine Legislature also created a blockchain technology working group tasked with developing "a master plan for fostering the expansion of the blockchain technology industry in the state," in addition to recommending "policies and investments to make the state a leader" in the niche. But again, nothing significant has emerged, thus far, from the endeavor.

Otherwise, Maine.gov has a section about crypto investing. It's not as inflammatory as some other states, but it does advise Mainers to proceed with caution.

Maryland Blockchain and Crypto Laws

In 2018, lawmakers instructed the state's Financial Consumer Protection Commission to establish a working group to study cryptocurrencies, digital currency exchanges, blockchain technology, and initial coin offerings. The group was also tasked with determining whether the state had the "authority to regulate 'Fintech' firms or technology-driven nonbank companies who compete with traditional methods in the delivery of financial services."

Ultimately, the group issued a report that rejected licensing registration for certain crypto-based companies but advised lawmakers to update the Maryland Money Transfer Act to include digital currency transmitters. In the end, representatives didn't fully heed the group's advice and implemented registration protocols for crypto "money service businesses."

In 2019, lawmakers passed Senate Bill 136, which allows corporate records, including stock ledgers, to be maintained on blockchains. However, the Maryland Securities Act requires certain digital currency traders and investment officers to register. Also, authorities did issue a consumer warning about the potential perils of crypto investment.

The state does have an active blockchain organization that aims to promote distributed ledger technology.

Massachusetts Blockchain and Crypto Laws

Massachusetts is a mixed blockchain bag. Boston-area universities all seem to maintain blockchain programs, and DAO businesses have collaborated on lobbying efforts to educate area officials. On the other hand, Massachusetts coin investors and crypto-based companies may incur a heavier tax burden than counterparts in other states. Moreover, businesses or individuals that disseminate crypto tokens online are considered "marketplace facilitators," and, under the letter of the law, are accountable for sales and use taxes.

In Massachusetts, it's all a bit murky. Blockchain businesses in the state are best advised to seek the guidance of a DeFi attorney.

Michigan Blockchain and Crypto Laws

The University of Michigan has an active blockchain lab committed to "building Michigan leaders in the blockchain space."

In 2019, Michigan's government passed a suite of five cryptocurrency laws, and it took a slightly different route than other states. Instead of tacking crypto onto money transmission and facilitator statutes, Michigan lawmakers made crypto-financial crimes illegal — just as they would be for cash crimes. Specifically, the regulations added virtual currencies into definitions for money laundering, embezzlement, and credit fraud.

Like most states, Michigan has a .pdf on its website explaining cryptocurrencies, and it's pretty neutral in tone. It defines a digital token as an "electronic medium of exchange that does not have all the attributes of real currencies. Virtual currencies include cryptocurrencies, such as bitcoin and litecoin, which aren't legal tender and are not issued or backed by any central bank or governmental authority." However, you can buy things with bitcoin and other accepted tokens in Michigan. It's up to businesses whether or not to accept digital currencies.

Minnesota Blockchain and Crypto Laws

The bulk of Minnesota's lawmakers aren't hot on crypto. The government's website includes a section called "Be Cautious of the Crypto Investment Craze," and the state legislature twice killed bills that would have added Bitcoin to the list of assets on the Minnesota Unclaimed Property Act. We're not talking about the standard registration and regulation fights; they had a problem handing over cryptocurrencies to the relatives of people who passed away.

The Minnesota Commerce Department joined an international ICO dragnet that targeted pump-and-dump scams called "Operation Cryptosweep." The initiative resulted in over 100 investigations and legal actions.

The state is a bit more friendly regarding blockchain technology, and there's an active non-profit working to attract innovative blockchain startups to the area.

Mississippi Blockchain and Crypto Laws

Mississippi lawmakers don't seem to be paying much attention to cryptocurrencies nor launching any pro-blockchain initiatives. But doing nothing is better than implementing innovation-killing regulations and special taxes. An association that represents CPAs in Mississippi conducts seminars about Bitcoin and other cryptocurrencies, but that's about it.

Missouri Blockchain and Crypto Laws

In 2017, a group of Missouri legislators introduced a very specific bill that would make it illegal to store firearm owner data on a blockchain. It died in committee. Other than that, not much is happening in Missouri in terms of blockchain and cryptocurrencies. At the same time, very little is standing in the way for fintech startups.

Currently, a handful of definitional law changes to include "virtual currencies" under certain statutes are under consideration, but there hasn't been much word on how it's going.

If you live in Cool Valley, though, the crypto atmosphere is decidedly more friendly. In August of 2021, the small town's mayor announced his desire to give every resident $1,000 in Bitcoin. He claims to be raising funds to make it happen, so we'll keep our eye on the situation.

Montana Blockchain and Crypto Laws

When it comes to blockchain and cryptocurrency regulation and laws, Montana is somewhat of a pioneer.

In 2019, the state's legislature ratified House Bill No. 584, which exempts blockchain-based utility tokens from securities regulations since they have a "primarily consumptive" purpose. That doesn't mean Montana is a registration and tax-free haven for crypto companies and investors. Before picking up sticks and moving your operation to Big Sky country, consult with a blockchain lawyer to ensure it's a suitable jurisdiction for your startup or business.

Montana is the only state that didn't enact a money transmission law that expressly requires reporting political contributions "made through a payment gateway." It's also the first state to directly invest in a bitcoin mining operation.

The Treasure State is also a vanguard when it comes to mining. In 2021, Missoula County passed a regulation requiring all mining operations to generate renewable energy and steer clear of residential zones. The law is seen by many as the way forward for all crypto mining operations.

Nebraska Blockchain and Crypto Laws

Nebraska is another mixed bag when it comes to crypto and blockchain laws and regulations.

The state's main digital currency and distributed ledger law is the Nebraska Financial Innovation Act. Essentially, it allows for the widespread use of crypto in the state. On the flip side, it also clears a path for the Nebraska Department of Banking and Financing to implement regulations.

On the plus side, Nebraska is one of the few states contemplating a charter that would allow banks to offer cryptocurrency services.

Nevada Blockchain and Crypto Laws

Nevadans have always marched to the beat of their own drummers, and a revolutionary crypto city idea being pitched to local officials is more evidence of the state's libertarian sensibilities. Jeffrey Berns, a crypto millionaire, wants to set up an economic zone in Nevada that would allow local governments to be formed on land owned by tech companies. But it's just an idea, and there's been no movement on the project to date.

According to regulations established by the Financial Institutions Division of the Nevada Department of Business and Industry, cryptocurrency operators must secure a money transmitter license and surety bond to conduct business in the state. Chapter 671 of the Nevada Revised Statutes says that any "entity engaged in the business of selling or using checks or of receiving for transmission or transmitting money or credits" must obtain a money transmitter license. Bitcoin ATMs, of which there are about 110 throughout the state, are also beholden to the law.

Additionally, state lawmakers are exploring ideas to introduce blockchain innovations to the state's legal cannabis industry.

New Hampshire Blockchain and Crypto Laws

The "Live Free or Die" state exempts "persons who engage in the business of selling or issuing payment instruments or stored value solely in the form of convertible virtual currency" from New Hampshire's money transmission regulation.

In 2019, lawmakers introduced a bill that, if passed, would allow people to pay their taxes in cryptocurrencies. But they shot it down in 2020. Additionally, the federal government launched high-profile raids of crypto companies in the state.

New Jersey Blockchain and Crypto Laws

New Jersey requires businesses and individuals involved in trading and selling digital currencies to register with the state's securities board, which actively pursues entities that don't comply. To give you an idea of the board's stance, in 2021, it ordered BlockFi to stop issuing interest-bearing digital currency products in the state.

But Jersey's blockchain and crypto landscapes aren't all bleak. Legislators are currently considering NJ A2155, the "Digital Currency Jobs Creation Act." It aims to "[establish] a regulatory framework for digital currency businesses to operate in New Jersey and [create] certain incentives for digital currency businesses to locate in the State." Moreover, in 2019, the Garden State established a blockchain initiative task force. The bill read:

"Blockchain technology is a promising way to facilitate a transition to more efficient government service delivery models and economies of scale, including facilitating safe, paperless transactions, and permanent recordkeeping nearly resistant/impervious to cyber-attacks and data destruction."

New Mexico Blockchain and Crypto Laws

New Mexico is big on blockchain education, and officials established the New Mexico Education Blockchain Initiative (NMEBI). Moreover, New Mexico Community College was the first educational institution to issue student-owned digital diplomas using the innovative technology.

In terms of registration, the state's regulation and licensing authorities issued money transmitter licensing guidance for entities that traffic in "virtual currency or money or any other form of monetary value or stored value." A bill was introduced in 2019 to formalize the guidance, but it hasn't gone anywhere, leaving the state's crypto landscape in limbo.

New York Blockchain and Crypto Laws

New York hates crypto. They have consistently been the most anti-crypto, and it is not surprising considering Wall Street. The Empire State has the strictest anti-crypto regulations in the country. The state's Department of Financial Services implemented a regulatory licensing framework called "BitLicense." Qualifying is difficult, and the law caused a mass exodus of blockchain and crypto companies from the state.

New York does have a digital currency task force, and about four crypto-related bills are currently making their way through the Assembly. One has to do with allowing for signatures through smart contracts; the other three establish the creation of study groups and special offices meant to advocate on behalf of blockchain startups in the state. Whether or not any will be passed remains to be seen.

North Carolina Blockchain and Crypto Laws

North Carolina's Money Transmitters Act covers virtual currency transactions and activities, which means crypto traders and exchanges must secure a license. However, unlike conventional fiat investment vehicles and funds, crypto companies don't need to maintain reserve funds equal to the customer's aggregate investment, making North Carolina a more attractive option than many other states.

North Carolina established a working group — the North Carolina Blockchain Initiative — to explore how blockchain can enhance bureaucratic administration and spur the state's economy.

In terms of consumer adoption, Bitcoin ATMs can be found all over North Carolina, especially in grocery stores.

North Dakota Blockchain and Crypto Laws

Williston, a city in North Dakota, accepts bitcoin for utility payments, and the Grand Forks Growth Fund loaned a mining outfit over $200,000 to set up shop in the state.

In terms of policy, over the years, North Dakota legislators have considered several blockchains and crypto-related bills dealing with exemptions, but all have failed. However, in 2019, they managed to pass a law that created a group to "research and develop the use of distributed ledger-enabled platform technologies, such as blockchains, for computer-controlled programs, data transfer and storage, and program regulation to protect against falsification, improve internal data security, and identify external hacking threats. Research must include efforts to protect the privacy of personal identifying information maintained within distributed ledger programs."

Additionally, legislators added terminology related to electronic signatures, smart contracts, and blockchains to the state code.

Ohio Blockchain and Crypto Laws

In 2018, Ohio was the first state to allow companies to pay certain taxes with cryptocurrencies. But then legislators turned around and banned people from using crypto to buy alcohol, which everyone agreed was a strange and very specific flex.

Ohio has a section on its website entitled "Be Cautious of the Crypto Investment Craze," yet digital currencies are growing in popularity throughout the state.

At the time of this writing, lawmakers are considering a bill that would allow state officials to use "distributed ledger technology, including blockchain technology, in the exercise of its authority."

Oklahoma Blockchain and Crypto Laws

Oklahoma is middle-of-the-road when it comes to blockchain and cryptocurrency law. Currently, the state legislature is considering several bills that would change certain definitions in the legal code. At the time of this writing, lawmakers still have yet to vote on the proposals.

In February 2021, a small bank in Oklahoma, Vast Bank, set up a cryptocurrency app for people who want to buy and sell tokens. Other than that, there hasn't been much news or policy maneuvering to date.

Oregon Blockchain and Crypto Laws

Oregon's Money Transmitter Act includes virtual currencies. As such, cryptocurrency trades, sales, and purchases incur tax burdens. Also, businesses and professionals that offer crypto investment and exchange services must register with state authorities.

In 2019, lawmakers adopted a bill that:

• Prohibits the government from accepting cryptocurrency as payment
• Forbids politicians from accepting crypto campaign contributions

On the bright side, the University of Oregon maintains a blockchain working group.

Pennsylvania Blockchain and Crypto Laws

Pennsylvania is relatively regulation-free when it comes to cryptocurrencies. The state doesn't recognize virtual currency as money. Therefore, most people and businesses who traffic in the space are not required to register with various state authorities. Even crypto ATMs are exempt from certain registration standards. (Federal registration requirements, however, still apply.)

Currently, Pennsylvania lawmakers are considering establishing a blockchain working group.

Rhode Island Blockchain and Crypto Laws

According to the Rhode Island government:

"R.I. Gen. Laws § 19-14-1(4) sets forth the several categories of business activities that fall into the definition of 'currency transmission.' Specific to 'virtual currency,' § 19-14-1(4)(ii) provides licensure is required for 'maintaining control of virtual currency or transactions in virtual currency' 'on behalf of others.' If a business is participating as one party in a two-party transaction with its customer to buy and sell VC, it is not considered to be controlling a transaction on behalf of others. RI currency transmission licensure would NOT be required for a business that sells or buys VC in customer transactions in exchange for fiat consideration."

In 2021, two representatives introduced a bill in the Rhode Island General Assembly entitled "Rhode Island Economic Growth Blockchain Act." However, it appears to have died in committee. However, lawmakers may revive it in a future session.

South Carolina Blockchain and Crypto Laws

South Carolina is a relatively pro-blockchain state that's passed several business-friendly resolutions.

SC H3495 is a proposed law currently being reviewed by the House Committee on Labor, Commerce and Industry. Called the South Carolina Blockchain Industry Empowerment Act of 2021, its goal is to "establish the state as an incubator for tech industries seeking to develop innovation by using blockchain technology."

In March of 2020, lawmakers also passed "a Senate Resolution To Acknowledge The Importance Of Emerging Blockchain Technology And To Call Upon The Residents Of South Carolina To Join In Encouraging The Promotion Of Blockchain Technology In Our State."

The resolution urged the state to embrace the emerging technology in an effort to become "the capital for the real-world application of the emerging technology of blockchain."

In terms of registration requirements, South Carolina's government website reads:

"The Money Services Division views virtual currencies as lacking the characteristics necessary to be a medium of exchange. Therefore, it is the view of the Division that virtual currencies alone do not qualify as monetary value. However, to the extent that virtual currency transactions also involve the transfer of fiat currency, they may be subject to money transmission regulation under the Act."

South Carolina has an active state blockchain association.

South Dakota Blockchain and Crypto Laws

South Dakota's blockchain and cryptocurrency laws aren't notably remarkable, yet the midwestern state has attracted several top-tier blockchain companies.

In terms of policy, not much is happening in the Mount Rushmore State. Lawmakers added blockchain to the electronic record and signature statutes, but that's about it. Additionally, the Dakota Division of Banking released a recommendation stating:

"[V]irtual currencies, including cryptocurrencies like Bitcoin, are 'monetary value.' Accordingly, entities that receive virtual currency, including cryptocurrencies like Bitcoin, for transmission within or outside The United States by any means, including wire, facsimile, or electronic transfer would likely be required to obtain and maintain licensure pursuant to SDCL Chapter 51A-17 in order to operate in South Dakota."

In other words, if you operate a crypto exchange or investment firm, you'll likely need to register with state agencies. However, South Dakota's regulations aren't onerous. Anchorage, a crypto investment holding firm, notably chose South Dakota to open its new offices. According to an article in the Argus Leader:

"South Dakota officials with the state's division of banking had clearly done the legwork to understand cryptocurrency and set up rules so they could be treated like other financial assets, while granting the flexibility required in blockchain-based assets."

Tennessee Blockchain and Crypto Laws

Generally speaking, Tennessee is a relatively crypto-friendly state. However, lawmakers don't seem all too interested in establishing a formal working group to explore blockchain's potential. But that's not necessarily a bad thing.

They have cleared the path for blockchain businesses by passing a law declaring smart contracts equivalent to traditional contracts.

Additionally, some local governments in the state are exploring the possibility of paying employees in bitcoin and other cryptocurrencies.

Texas Blockchain and Crypto Laws

Texas is angling to become a blockchain hub. The Lone Star state has passed several laws that make it attractive to businesses and crypto investors. In 2021, the governor signed a bill classifying cryptocurrency under commercial law, making it easier for blockchain businesses to set up shop in the state. Lawmakers are also welcoming mining operations with open arms.

Generally speaking, Texas has long been an anti-regulatory state, making it a comfortable spot for startups and tech companies.

The University of Texas has a robust blockchain organization, and its goal is to "build cognizance and competence through focused research, workshops, coursework, conferences, and speaker series."

Since China banned token mining in September 2021, Texas hopes to attract some big players in the space.

Utah Blockchain and Crypto Laws

Utah is relatively welcoming of digital currency and blockchain-based companies, and virtual currency is on the list of "property" under Utah's Revised Uniform Unclaimed Property Act.

The state taxes crypto gains, and any party that "provides a virtual currency for a purchaser to use to purchase tangible personal property, a product transferred electronically, or service offered for sale" qualifies as a "marketplace facilitator" and is subject to sales tax obligations.

At the time of this writing, the Utah Department of Financial Institutions hasn't published any guidance on virtual currency regulations.

Utah is somewhat unique in that it established a "regulatory sandbox" that allows companies to "temporarily test innovative financial products or services on a limited basis without otherwise being licensed or authorized to act under the laws of the state."

Utah's Blockchain Technology Act exempts any "person who facilitates the creation, exchange, or sale of certain blockchain technology-related products from Title 7, Chapter 25, Money Transmitter Act [and] creates a legislative task force to study the potential applications of blockchain technology to government services."

Fun Fact: Residents of Utah are especially in love with Dogecoin. Additionally, a Utahn was the first citizen to cast a presidential vote via a blockchain app.

Vermont Blockchain and Crypto Laws

Vermont sees crypto as a "permissible investment," and entities that provide "a virtual currency that purchasers are allowed or required to use to purchase products from sellers" are considered "marketplace facilitators." As such, there are licensing and registration requirements for parties that hold over a certain amount of crypto and businesses that offer token exchange or investment services. The state also passed a unique law that formally recognizes blockchain data in the court system.

In 2017, Vermont authorized a blockchain study group exploring how blockchain could impact the state's job market. In 2018, the governor signed a bill into law that allowed for "blockchain-based limited liability companies," a special business formation category. Companies that register under the designation must "specify whether the decentralized consensus ledger or database utilized or enabled by the BBLLC will be fully decentralized or partially decentralized and whether such ledger or database will be fully or partially public or private."

Under Vermont's Revised Uniform Unclaimed Property Act, virtual currency is listed as property.

Business groups in the state have initiated lobbying efforts to establish a "favorable regulatory environment for blockchain-based businesses," and they've been marginally successful. In the northeast, Vermont is one of the better options for blockchain-based companies.

Virginia Blockchain and Crypto Laws

Virginia requires virtual currency companies to secure money transmission licenses. Also, "[p]roviding a virtual currency that buyers are allowed or required to use to purchase products from the seller" renders one a "marketplace facilitator" responsible for complying with all the attendant registration and reporting requirements. Thrice, Virginia lawmakers tried to pass pro-crypto bills, but all failed.

Fairfax County is exploring the idea of investing its public pension fund in a crypto opportunity.

Washington Blockchain and Crypto Laws

Washington State, like New York, heavily regulates crypto exchanges, businesses, and investors. Digital currency exchange operators must comply with the same requirements as traditional money transmitters. As a result, many blockchain-based companies have fled the state, including Poloniex, Bitstamp, Bitfinex, and Kraken.

The Evergreen State also has strict rules regarding crypto-related taxes — for mining, selling, and investing — yet it's one of the few states that formally recognize "the validity of distributed ledger technology." However, the Washington Department of Revenue doesn't accept bitcoin or other digital tokens for taxes.

In 2020, Washington's governor vetoed a bill that would have established a blockchain working group.

West Virginia Blockchain and Crypto Laws

West Virginia holds a unique place in the pantheon of blockchain law: it was the first state to roll out a blockchain-based mobile voting system. However, it didn't last, concerns arose, and the state reverted to paper voting.

In 2017, lawmakers passed a law defining cryptocurrency; it also established a few anti-money laundering standards regarding virtual currencies. Moreover, under state law, any party that provides "a virtual currency that buyers are allowed or required to use to purchase products from the seller" is a "marketplace facilitator" and subject to the requisite registration and reporting requirements.

In general, West Virginians seem enthusiastic about the potential of blockchain technology, but apart from the voting experiment, not much has happened in the state policy-wise regarding the industry.

Wisconsin Blockchain and Crypto Laws

Wisconsin isn't a crypto-friendly jurisdiction. For starters, authorities often refuse to issue money transmitter licenses to digital currency companies. Plus, if a company tangentially deals in crypto, it must sign a formal agreement stating that it will not transmit money via cryptocurrencies. In 2019, legislators passed a law stating that "providing [of] a virtual currency used to purchase products from the marketplace seller" renders the entity a "marketplace provider" that might need to collect sales tax.

Despite the regulatory pushback, cryptocurrency use is on the rise in Wisconsin.

Wyoming Blockchain and Crypto Laws

Wyoming has been called the "Promised Land of Crypto." Early on, local lawmakers were eager to transform the midwestern state into North America's virtual currency Mecca, and they passed over a dozen blockchain-friendly pieces of legislation. The state even paved a way for crypto companies that had difficulty securing an FDIC-insured banking service. Plus, most "utility tokens" are exempted from the state's securities laws, a stance that sits in direct opposition to federal standards. As a result, Wyoming-based blockchain companies dealing in profit-bearing crypto initiatives and investment products must still register with federal authorities.

In addition to a handful of administrative definitional and administrative changes, Wyoming has laws on the book that:

1. Permit corporations to store records using blockchain technology
2. Exempt crypto operators from the Wyoming Money Transmitter Act
3. Exempt cryptocurrencies from state property taxes
4. Incorporate digital assets into existing statutes
5. Established a blockchain task force to ensure a smooth intersection between governance and blockchain technology
6. Clearly define which court jurisdiction handles digital assets
7. Allow "corporations to issue certificate tokens in lieu of stock certificates"

Developers and sellers of certain crypto tokens must file notices of intent and fees with the secretary of state, but the process is nowhere near as intense as in New York or Washington State.

Wyoming also passed the "Financial Technology Sandbox Act," which establishes a "regulatory sandbox" for blockchain companies "to develop the next generation of financial technology products and services in Wyoming."

In 2021, Wyoming lawmakers were the first to introduce legislation to regulate decentralized autonomous organizations and grant DAOs the ability to form limited liability companies.