CHEYENNE – Canadian blockchain company BlockCrushr Labs opened its first Wyoming office last week in Cheyenne, arriving before the state Legislature considers changes that would encourage more such businesses to operate in the state.
BlockCrushr Labs CEO Scott Burke announced another corporate branch housed on Cheyenne’s Second Floor at The Paramount on Wednesday. Company leaders have filed for a Wyoming subsidiary, BlockCrushr Wyoming LLC.
Burke supports the state’s recent push for cryptocurrency and blockchain technology. Their other office is in Halifax, Nova Scotia.
BlockCrushr Labs develops and commercializes blockchain technology.
Founded in April 2016, its leading product is TokenClub, a monthly initial coin offerings subscription service. Similar to a Kickstarter campaign, initial coin offerings use blockchain-based tokens, or cryptocurrency, to raise money for various causes. This can be used to ensure funds are going to their intended destination.
They also established a system to provide hungry people in a community with crowdfunded digital food wallets.
The company wants to continue to streamline blockchain using the state’s upcoming legislation.
“We are looking to do real business in the state, if the current legislative trends continue,” Burke said.
They are in the process of conducting interviews in Cheyenne, and invite anyone interested to reach out.
“Since our initial announcement, we have had a number of individuals and institutions contact us, including the University of Wyoming,” Burke said. “We will do whatever we can to assist the development of the blockchain ecosystem in Cheyenne and Wyoming generally.”
Blockchain is a digital ledger, or a place to securely store documents, information or cryptocurrency. Think of it as a chain of blocks connected in a hyper-secure digital space. Each block composes each individual’s personal information they wish to keep on the chain.
In order to edit each block, you must have an encrypted password only you know. Many documents on the blockchain can be accessed and viewed publicly, but edits demand extra security.
Cryptocurrencies are, essentially, money. If people assign value to the digital money and use it to make purchases, blockchains let you buy, sell and trade without the assistance of a third party, such as a bank.
Bitcoin is the most well-known form of cryptocurrency. Anyone can invest in bitcoin and make purchases, cashing out into legal tender if the market is favorable to such a move.
Bitcoin and blockchain, while working together, are not synonymous. Bitcoin may need blockchain to operate, but blockchain contains its own world of possibilities. There is some indication that successful tech companies will soon be operating exclusively on the blockchain.
Potential real-world benefits of blockchain include reducing health-care costs by eliminating information duplication, and giving local food producers the ability to guarantee their customers certified Wyoming products via product tracking.
Wyoming is an ideal place for the blockchain sector to flourish, Burke said. A business-friendly tax system, low startup costs and a growing number of supportive legislators make the state a stomping ground for blockchain technology.
Many states are hesitant to loosen blockchain laws, because cryptocurrency scams are abundant in the industry. Market manipulation, dishonest sales practices and hacking are just a few notable problems with the technology. The Securities and Exchange Commission, which regulates investment markets, recently started cracking down on some of the more unregulated companies.
The move to Wyoming comes as four House bills are introduced this legislative session. The package of legislation would reduce legal restrictions on the growing data exchange system.
“We haven’t even passed the bills yet, and a company is already opening a business here,” Rep. Jared Olsen, R-Cheyenne, said.
Olsen is a co-sponsor of pieces of the legislation alongside a dozen other lawmakers.
Two of the bills would exempt cryptocurrency from Wyoming’s money transmitter and securities laws, as long as it is not exchangeable for goods or services. It would also exempt data exchanges on the blockchain from being deemed broker/dealers under Wyoming law, easing regulation and allowing certain companies to come to Wyoming and sell cryptocurrency.
“If we pass this, it will become the model legislation for the country,” Olsen said.
Olsen uses examples such as Uber and Tesla’s new operations in the state as evidence of a much-needed update to antiquated business regulations. In 2015, the blockchain company Coinbase left Wyoming due to stricter laws.
“We had to carve out exemptions for virtual currency then, and we are doing it for blockchain technology now,” Olsen said.
The legislation would ease regulatory rules so that blockchain technology and digital currencies like bitcoin could operate in Wyoming. The Wyoming Money Transmitters Act ended regular use of the technology. Blockchain is a flagship technology for data storage in government, Olsen said.
The third bill, yet to be introduced, would integrate all government record-keeping, creating a digital database of all important documents using the blockchain. Olsen said, as a lawyer, he thinks Wyoming can benefit greatly from modernizing the way it files and accesses government documents. Because the blockchain requires everyone on the chain prior to you in time to consent to make a change, it is the most secure way to store information.
“It is the most secure ledger we’ve seen in human history,” Olsen said.
The fourth bill deals with limited liability law. It would allow companies to file as Series Limited Liability Companies, easing the filing process for businesses thinking about coming to Cheyenne.
“There is a good portion of the tech world that is watching Wyoming right now to see what happens,” Olsen said.