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Wyoming pitches a potential launch date for its state-backed stablecoin, Kraken learns that it will see the SEC in court, and the wife of a detained Binance compliance executive continues to plead for his release.
Wyoming is aiming to become the first US state to issue its own stablecoin, under the latest plans unveiled by its blockchain-friendly governor.
Speaking this month at the Wyoming Blockchain Symposium, Governor Mark Gordon said the state is working towards launching its own US dollar stablecoin in early 2025.
“I think the world is moving very rapidly to digital assets,” he said. “The technology is changing at all levels, but we want to make sure in Wyoming that it’s transparent, that it’s well done, with good deregulation.”
In March, the state passed the Wyoming Stable Tokens Act, which was originally introduced to the legislature in January 2023.
As per the legislation, the stablecoin will be backed entirely by US Treasury bills and repurchase agreements (repos), and will be offered by selected crypto partners.
The act also states that interest income generated by the reserves will be used to diversify state revenue streams and fund Wyoming’s School Foundation Program.
In addition to governing the state, Gordon chairs the Wyoming Stable Token Commission, which is handling the administration of the new asset.
In March, the commission requested a one-time budget of $5.8m, which was approved as part of the state’s biennial budget bill.
“Over the last seven years, our legislature has passed more than 40 laws to create a regulatory environment conducive to innovation around this emerging technology,” said Gordon.
“States have a unique ability to issue stable tokens that can increase US dollar hegemony and function as a public good.”
The symposium was hosted by SALT, a global investment and thought leadership platform, with support from Kraken and the University of Wyoming Center for Blockchain and Digital Innovation.
David Ripley, CEO of Kraken, attended the symposium and spoke favourably of Gordon’s plans and Wyoming’s efforts to fashion itself as a crypto capital for US firms.
“This whole industry really is about freedom, innovation, individuals being able to have a seat at the table, financial inclusion,” he said.
“All of these really noble end goals that I know will be realised by crypto — it’s really just a matter of time.”
In June last year, Wyoming became the first state to recognise a new kind of bank, the special-purpose depository institution (SPDI), which is a regulated custodian for crypto-assets.
In 2018 and 2019, Wyoming passed a series of laws to develop a favourable environment for crypto mining and other blockchain activities, including energy and data centre cost reduction schemes.
Wyoming also has no state income tax and no tax on crypto-asset sales, although profits from crypto-asset sales within the state are still subject to federal taxes due to be paid to the Internal Revenue Service (IRS).
SEC’s case against Kraken cleared for trial
Two days after the symposium in Wyoming, Kraken learned that it will face the US Securities and Exchange Commission (SEC) in court on unregistered securities charges.
Judge William Orrick of the Northern District of California denied Kraken’s motion to dismiss the case, stating that the SEC has “plausibly alleged” that some transactions facilitated by Kraken constitute investment contracts and therefore securities.
Orrick also called for a proposed case schedule and trial date to be filed no later than October 8, 2024.
In November 2023, the SEC sued Kraken for operating as an unregistered securities exchange, broker, dealer and clearing agency.
Kraken does not deny that it never registered with the SEC, but it argues that it does not need to, because the transactions it enables on its platform do not involve securities and therefore do not fall within the SEC’s jurisdiction.
Both Coinbase and Binance, which are facing the same charges from the SEC, have argued the same point in their defence.
However, Orrick pointed to previous court rulings, including SEC v Ripple, which have found that crypto-assets that are not in themselves securities can nonetheless be offered as securities.
In February, Kraken appeared to validate this logic when it agreed to cease offering and selling securities as part of crypto-asset staking programmes and pay a civil penalty of $30m to the SEC.
Wife of detained Binance exec pleads for US intervention
The wife of Tigran Gambaryan, a Binance compliance executive who is facing criminal charges of money laundering in Nigeria, has issued a video statement calling on the US government to rescue her husband.
"It has been six months since I last saw my husband, since our children last held their father’s hand," Yuki Gambaryan said in a video published on Monday (August 26).
"His health is deteriorating to the point where he can no longer walk. Between bouts of malaria, pneumonia and the unimaginable mental toll of his detention, he is now reaching the point of no return."
Gambaryan has now spent six months in detention in Nigeria’s infamous Kuje prison, where his fellow inmates include convicted Boko Haram and Islamic State fighters.
Yuki described this period as a “living nightmare” for her and her children. She said she has pleaded with both the US government and Nigerian governments to “bring my husband home”, but so far to no avail.
As things stand, Gambaryan’s trial is set to recommence in October.
