NTE 56 | Wyoming Blockchain


With the current political climate and financial system lacking transparency, how do you spearhead the solution that is blockchain? In this episode, we talk to 22-year Wall Street veteran and gubernatorial appointee to the Wyoming Blockchain Task Force Caitlin Long. Her discovery of the inaccuracies in Wall Street’s ledger systems that affected many pensioners led Caitlin to think of the benefits of a distributed ledger technology and to bring these benefits to her native state of Wyoming. On today’s show, she details her labor of love to make Wyoming an oasis for blockchain soon.

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Wyoming Blockchain Oasis With Caitlin Long

I’m excited for quite some time to bring you this guest because it’s a topic that I think we all want to talk about, especially if we’re building blockchain businesses and crypto-based businesses that we’re thinking about where are we going to locate ourselves? What are we going to do? Where is the environment that is going to nurture my growth and be right for my business? Some of those choices we make, we make them in the very early stage like when we form our company. I heard from an audience who sent me a tweet with a video interview with her and I said, “That’s it. I have to get her.” It’s taken me quite a few months. I am so glad to finally have Caitlin Long on my show.

Caitlin is a 22-year Wall Street veteran who has been active in Bitcoin and blockchain since 2012, way longer than me. She has been leading the charge to make her native state of Wyoming, an oasis for blockchain companies in the US where she has helped Wyoming enact thirteen blockchain enabling laws in 2018 and 2019. From 2016 to 2018, she spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain startup, Caitlin ran Morgan Stanley‘s pension solutions business at Credit Suisse and had held senior roles at Credit Suisse and began her career at Salomon Brothers. She’s a graduate of Harvard Law School, Kennedy School of Government and the University of Wyoming. Caitlin, I’m so glad to have you here.

Tracy, it’s my honor to be here. Thank you for inviting me.

This is a hot topic among company organizers. I talked to someone who was big in Nevada for a long time, and then there are those Delaware ones and now Wyoming’s popping up as being an oasis. What I heard you talk about that caught my ear was understanding what made it right for business, not just what it made it right for financial data and information. Tell us a little bit about why you got excited about and interested in being a blockchain advocate and being that type of making Wyoming an oasis as you put it.

I’m a Wyoming girl through and through, born and raised and lived away for 29 years total, which 25 were in the New York area, either in the city or the ‘burbs. I ran a couple of businesses on Wall Street, one of which was the pension solutions business at Morgan Stanley as you mentioned. I saw some things that were just unfair and they hit me in the gut. It all pertained to inaccurate ledgers. Some of the issues are accidental and a vestige of history that just haven’t been fixed yet because of inertia. Some of them are also nefarious. There are people out there who know how to work the system so to speak and try to double-dip in a couple of instances that I know of. They were stealing money from pensioners, stealing money from mom and pop in those in those situations. It was wrong. I was experiencing that roundabout about the time that this whole concept of enterprise blockchain cropped up. I met Ripple in very early days. It was early 2014.

In the beginning, as I wasn’t sure that that Bitcoin had an application to the mainstream financial system, but when Ripple came along that that set light bulbs off in my head. We can apply this technology to mainstream assets as well. I’ve gone full circle from a detour in enterprise blockchain. There are a few of us in the industry you have. There are certainly are benefits that distributed systems like distributed ledger technology can have in an enterprise context. I’m now back full circle as I think a lot of others who did the same detour. I have concluded that it’s the truly decentralized platforms that are the most powerful technology and they’re the ones that are going to be making the system fair.

In terms of the connection to Wyoming, Wyoming is a very independent place. It’s the state that gave women the right to vote 50 years before the United States did the US Constitution. When Wyoming gave women the right to vote, Congress said, “We won’t make you a state until you remove that.” Wyoming said, “Thank you. We’ll wait.” Ultimately they did remove it. If somebody thinks of history, it’s not a totally black and white story. They voted to give women the right to vote because they didn’t have enough people here to become a state. The next year that took it back, but it didn’t pass by a veto-proof majority, so the law stood. It’s an interesting history, but those vignettes are important because it gives you some sense for the culture here.

There’s something very important also along the lines of business entity formations. Wyoming invented the limited liability company in 1977. We have a history a little over 40 years ago of inventing interesting things with new technologies. Wyoming is number two behind Delaware. We surpassed Nevada for the States with the highest number of new business entity registrations because of that LLC history. Because of the fact that we truly believe that what’s mine is mine and what’s yours is yours. We don’t think the government should be grabbing people’s assets. Taxes are very low here. That’s why we surpassed Nevada.

I love that little bit of Wyoming history you gave us there because it’s such an interesting concept to the basis for how am I going to form my company and what is my company going to be about. I think that that’s as principled a decision as you can make. It’s not just about, “I want to take advantage of some laws or anything.” It’s starting to think about like, “Where’s my corporate value? What is it going to be? How am I returning that to its investors? What is all of that going to do?” Being thinking about that basic level of where am I going to form it starts with that thought process as well. Having the state in the spirit of that as well is a great benefit.

It’s interesting because Wyoming created the LLC to take on the very strict rules that Delaware has for corporations. Those rules are applicable to large ongoing publicly traded companies. It’s tough for a startup to comply with a lot of those corporate rules. A lot of times what happens is startups will start as LLCs and then if they are successful, eventually they convert to a corporation precisely because they don’t want to have to start with meeting all those corporate requirements off the bat. What’s interesting is that venture capital still definitely has a preference for Delaware corporations. I think Wyoming is going to eat into that pretty fast for two reasons. We don’t charge corporate tax. Delaware charges corporate tax and franchise tax. Eventually, companies are going to look at that and say, “Why am I paying all this money when I can get the same benefits in a different state for a lot less money?” Think about the present value of all those fees. When you add them up, it’s pretty significant to Delaware. It’s a high tax state.

NTE 56 | Wyoming Blockchain

Wyoming Blockchain: It’s the truly decentralized platforms that are the most powerful technology and that are going to be making the system fair.


On top of that, what Delaware always had is what’s called a business court where litigation happens with business-savvy judges. Wyoming set one of those up. It was the last leg of the stool for Wyoming that makes us a destination for business. Stay tuned because I think lawyers are going to very quickly not only see that we probably adopt Delaware corporate case law precedent, but also in the crypto space, we’ve already had litigation. We’re starting to have not only case law precedent in the crypto area in Wyoming, but also the judges and the bar in Wyoming is starting to get up to speed. We’re going to beat Delaware and Nevada and all other states on that because this is the place where crypto is going to end up being domiciled and litigated. Nevada put a gross receipts tax in place. You’ve got Delaware, which among the top three destinations for business registration. It’s clearly the highest tax, but it’s also the incumbent. Nevada put a gross receipts tax in place. As soon as Nevada did that, Wyoming leapfrogged them. We’ve got a history of respecting people’s property here to the greatest degree possible. I think you’re going to see crypto companies come here. We’ll talk a little bit about the special purpose depository institutions that are going to definitely bring companies here as well.

That’s what I wanted to tap into next. You put in some laws and some different things in place. Let’s lay the basis for what happened in 2018 and 2019 with what’s put in place specifically for corporations to be attractive, to be that oasis that you talked about before.

Speaking specifically from a new business startup perspective, what are the things you care about? There’s already no corporate tax, there’s already privacy in LLC. The State of Wyoming does not collect much information about its LLC register. Privacy is a big benefit here as well. Those are the great building blocks. On top of that, we specifically exempted crypto from property taxes. We exempted crypto from the money transmission statutes. If you’re going to be handling crypto as an exchange or a lending company or a custodian, you don’t need a money transmission law licensing Wyoming for that. We created the utility token bill, which is the first US state to acknowledge that there is such a thing as a consumptive token that is not a security, even though it’s issued in these in these systems.

We also created series LLCs which probably won’t apply to most companies, but there will be a few of you for whom that’s meaningful, especially software foundations that want to have a parent company holding the license and then dropping a bunch of child LLCs off that parent company. It can be a cost-effective way to set up a lot of LLCs where you’ve got a common interest like that. In 2019, we got eight more done. One is a fintech sandbox. If you’re in an area where you might not technically qualify for a license because you’re doing something new and unusual, you have a way to get exempted for up to three years from the statutes. You just have to let the regulators know who you are and what your business is.

Probably the most important bill is the one that may not be applicable as much to businesses, to startups in this space, but it’s important to everybody in this space, which is we define the rights and obligations under the law of parties in a crypto transaction. Why is that important? Because if you get into a legal dispute, crypto falls into the gray area in the United States and you don’t know how a judge is going to act. Having some certainty on how a judge is going to look at the rights and obligations of parties to a transaction that ends up in a dispute. That’s huge. It may or may not be relevant to your business, but it’s pretty basic.

The government should not be grabbing people's assets. Share on X

Trace Mayer calls it a protocol layer of the legal system topic. It’s very boring, but it’s in every transaction commercially that we do that’s governed by commercial law and there wasn’t any definition whatsoever regarding crypto. As we take out to the next level, that is important also because crypto is an asset that you should be able to pledge as collateral for loans. There was no clarity on how to perfect a security interest, which is what lawyers call creating an enforceable lien against collateral. All the crypto lenders are just doing it by contract. Frankly, if there’s a dispute, you’re back to that legal uncertainty. The judges necessarily aren’t going to respect your contract if it doesn’t think it complies with the law. This is pretty basic but important stuff and that all feeds into what we’re doing then with a special purpose depository institution and crypto custodians in Wyoming.

What’s the ideal type of startup of a company that you want to attract? Is there a specific type that you think Wyoming is ideal?

No, any and all. Anybody who wants to take advantage of a low tax state that gives you definition in the statutes for crypto and exempts you from money transmission license requirements for being here. That describes pretty much 99% of the crypto startups that are looking to be onshore in the United States. It is worth saying, being a state within the United States you’re not exempt from federal taxes. You still have to pay the federal taxes, but the state taxes do not apply to crypto in Wyoming.

For everyone out there, I’m not a lawyer, but you all have to consult with your tax attorneys, your attorneys, and your regular thing. If you’re domiciled and you are operating in business in Wyoming, you may have to register as a foreign corporation. That’s what we have to do here in California, which is just such a mess and a disaster anyway. Make sure that you’re getting good advisors here. Let’s talk about their special depository because that is a cool and interesting content that you guys have created there. I think it’s a very big attraction point.

Yes, it is. I think there will be four or five of them open in Wyoming if all goes well. These are bank licenses. It takes six to nine months to stand up a new bank. They have to go through a federal reserve process too because the law requires them to get what’s called a Fed Master Account. I’m definitely letting everybody know this is not a sure thing. These are not simple processes, but there is a group of five that have indicated an interest in applying. Applications just opened. There’s nothing to announce yet. I think you’re going to see a couple of companies announcing that they applied. What’s special about it? Lots of things. We nailed it. I was on a continuing legal education call with the lawyers from Debevoise in New York, talking about all the issues that crypto. In part thanks to them, we addressed all of them, cryptology issues and crypto custody. Some of your readers are probably going, “What are we doing setting up a bank that’s a custodian of crypto?”

NTE 56 | Wyoming Blockchain

Wyoming Blockchain: Probably the most important bill to everybody in this space is the one where we define the rights and obligations under the law of parties in a crypto transaction.


That seems counter-intuitive.

Totally. It’s two things. One is these will be the first actual banks that the crypto industry itself controls. Because these are crypto companies applying for the license and they get their own Fed Master Account, which means that they don’t have to worry about losing access to basic banking services, which has been a perennial problem in this industry. It’s pretty much for all startups a given that you have to have two or three bank accounts. I’ve watched it happen with startups where you lose access to a bank and you’re out of business. Because to be a business in the United States, you have to have a bank account, unfortunately. It is a blocking issue and a lot of companies in this industry have lost bank accounts. There will be crypto companies that have access to the fed and can handle their own wires and control their own destiny. They have to know your customer and anti-money laundering analysis, but they’re handling it themselves instead of relying on a third party. That’s pretty big and I think you’ll be surprised at who shows up and who values that. The second thing is it acknowledges that there are some owners of crypto who unfortunately by law have to use a third-party custodian. What I’m referring to there are institutional investors who have to comply with the SEC custody rule. This is mutual funds, ETFs and the like.

Most pension funds, endowments, and foundations also voluntarily comply with the same rule or have their own specific rules that say that the managers are not allowed to have custody of the assets they manage. You have to separate that due to a bunch of fraud that took place in the 1930s in the US. I look at blockchain technology and say, “That’s your custodian right there.” The SEC doesn’t agree with that. Until that law changes, which is not likely to happen anytime soon, then any institutional adoption beyond hedge funds or venture capital funds, which are the highest risks portions of the institutional market, it’s impeded by not having a qualified custodian. We specifically set up a bank. It’s a bank, not a trust company. It’s not FTC insured. It cannot lend, so it’s a 100% reserve bank. Under the law, when they hold crypto-assets in trust for customers, they must hold one for one reserve. They’re not able to do these games that I saw in the traditional financial industry where they’re playing three-card Monte with your assets behind the scenes. Moreover, we have a specific protection for investors called a bailment.

A bailment is an old common law concept that says that’s like a valet parking arrangement for your car or a coat check. When you deposit your car at a parking garage and get your claim check, you’re not handing the garage title to your assets. You’re just hiring them as a service provider and they’re allowed to do one and only one thing, which is to park your car and then give it back to you when you ask for it. That’s not how financial services works. Most people don’t understand, even in their broker’s account. They don’t own the securities. What’s in their brokerage account is an IOU. Effectively, when you park your car, you’re handing over the title to your car and they give you an IOU back and they might not give you the actual car back when you want it back. Meanwhile, they’re running around with your car, leasing it out to Uber and pocketing all the profits and you’re taking all the risks without even knowing it. That’s how the financial services industry works and that’s why we get the shenanigans we get.

In Wyoming, that is expressly illegal. It’s a very investor-friendly approach and it’s directly aimed at taking on New York. Frankly, they’re so focused on the wrong things from a regulatory perspective. You deposit your car at the garage and they run around and earn money on it. Maybe they’ll throw you a little bit of it. They don’t have to give your actual car back. They might give your same make and model year. That’s the way financial services work. That is all legal in New York. It’s the basic stuff that shouldn’t be, but it is, yet New York is focused on all this other stuff when they should be focused on the basic stuff, which is when you put your money into a financial institution, is that financial institution solvent? Are they going to give it back to you when you want it?

It’s so interesting that you bring this up. I did a speech in front of 200 women in the investment community in New York City. I was giving them a little background. You may not realize this, but I was a blockchain skeptic like, “I’m not sure about this thing. I don’t know what’s going to happen here.” I can’t say I’ve totally come around on Bitcoin and crypto in general, but I have definitely come around on blockchain. It was an interview with Steve Wozniak that changed my perspective. I was asked to cover a conference for Inc. Magazine and I went to the conference to meet up with him and interview him. I interviewed a bunch of other people at the same time and got this broader exposure to what was going on in blockchain and crypto that I didn’t understand before in-depth enough. What I saw there though was that solutions to problems and solutions to dissatisfaction. That’s exactly what I saw when I was trying to explain to the women in New York.

I was saying to them like, “Steve Wozniak was explained to me that he was excited about it because it preserves the creator’s value.” It’s in the ledger. You invented this, you created this. People built off of that, they owe you money if that’s in the deal, but it’s there that you did this. That was important to them. I am an inventor and I believe in that as well. That’s part of it. In the banking community and what’s going on, one woman walked up to me after I spoke about my interest in this blockchain and what’s going on in the space.

She walked up to me and she says, “I work for Chase Bank. We’ve been spending millions and millions of dollars on this blockchain thing. I didn’t understand before why.” I said, “The one thing you haven’t considered is that your banking system is not only in a way broken. It’s broken to the consumer. They see it’s broken nets too.” Which you don’t realize within the industry, you see it as broken because you understand this isn’t quite right. This isn’t quite how it should work. The consumers see it. We have a generation of people that understand, “You have a batch to close? That’s archaic.” Even your actual architecture that is built on is broken. You might as well blow it all up and start something new. That’s why they’re investing. She said, “That’s the first explanation I’ve heard that makes sense to me.” I was like, “Good. I’m glad you get that.”

It’s interesting because in the beginning when I was at Morgan Stanley, everybody around me was skeptical. The way I pitched it to people was it solves the duplication reconciliation problem. There are so much redundancy and expenses in the industry where everybody keeps their own copy of data and then reconciles against each other. There are entire back offices, tens of thousands of people working in the financial industry who did nothing but that. If you think about it, if you had an honest ledger that everybody could share, you don’t need any of that. That is a paradigm shift. No question. That’s why it’s been slow. That’s why a lot of the enterprise stuff truly has not gone as well as people thought like me in the beginning that it would. Because we were looking at it going, “There’s so much expense redundancy in the system. We should take it out.” It turns out there are also there’s inertia, there’s fear. Those banks IT stacks, some of them still have COBOL at the very bottom. If people are afraid of what happens if we take out a system and something breaks, that’s an issue at every one of the big banks.

They’re not interested in rip and replace. They’re more interested in incremental. I think Andreas Antonopoulos says it right. We saw the same thing in the development of the internet. We saw the walled garden intranets happening first. Once people got comfortable with the technology, the internet itself flourished. Everybody opened up their systems. Everybody’s got APIs now, and it’s a giant mesh network, but that’s not the way Wall Street works right now. There is a lot of incumbencies, but there are also a lot of people who make a lot of money off of the existing system. Those cases are the example of why the status quo system is broken, unstable and unfair. There were 36.7 million Dole Food shares, outstanding publicly-traded companies. The company was acquired. There was a class-action lawsuit and there was a settlement. All the shareholders were going to get another $1.25. 49.2 million claims were filed for the 36.7 million shares outstanding. When they looked at it, guess what? All 49.2 million had ballad brokerage statements.

NTE 56 | Wyoming Blockchain

Wyoming Blockchain: People are afraid of what happens if we take out a system and something breaks. It’s the same issue at every one of the big banks.


The bookkeeping systems of Wall Street created one third more claims to Dole Food shares than there were actual Dole Food shares outstanding. That’s insane. They pick the pocket of the Dole Food shareholders, that’s what I don’t understand. I’ve tried to get prosecutors to go after that because the vast majority of that was nefarious. There were people who knew that the bookkeeping systems didn’t reconcile and that they would be able to double-dip, that they sold the shares in a final couple of trading days of the company being outstanding, but that the bookkeeping systems wouldn’t keep up and they wouldn’t probably get caught. They got away with it because to my knowledge, I don’t think anybody’s ever been prosecuted. That’s a perfect example. I also realized after I figured out what happened, that happens in every single MNA transaction. Probably not to that degree, but people are getting their pockets picked. The way to get around that is, let’s go to an honest ledger system. That’s why I loved your story about Steve Wozniak. He was hitting on some of the same things.

There are a lot of industries like that. I have a client who works in the music industry and he was telling me some stories way back when. I’m an ‘80s girl. Casa Blanca Records, I don’t know if you remember them, but they were telling the story that they were doing this a system by which they would over ship the amount of records to record stores and then the record stores would get phone calls from the local DJs who weren’t sure if they should play the record and what they would say was, “We just got shipped in three cases of this record.” The DJs would go, “I guess we’re going to play this record that I don’t love. It sounds like they’re well shipped.” What happened was is that that was the Billboard charts and all of those things were being recorded on shipments, not on what sold. They could return them. There was no reconciliation. I worked for over 25 years in the product industry: mass-market sales, Costco, Walmart, Target, all of that.

We used to say that doing business with the office superstore sometimes was like working with the mafia. It was like, “If you want to keep your position and at the end of the year, you’re going to have to pay for all our ad losses,. We decided what the ads were.” Office Depot decides with the ads were or OfficeMax. “I’m sorry, but you’re going to have to make us whole if you want to keep your spot for next year.” That’s the stuff that would go on in these industries. You’d be like, “Did you ship that much? Did that happen?” None of that is being tracked. I see a lot of industries ripe for disruption. It’s not like there aren’t already cracks in brick and mortar retail. There are entire foundations missing. You guys have set a system that is going to be a great foundational for some of these new disruptive entities.

All these things, we recognize them as soft fraud but they’re legal. You gave a great example of what went on in the music industry. The track and trace companies that are doing this for food provenance, the stories that come out of that. The stuff that’s marketed as organic that isn’t is a significant percentage higher than the stuff that is.

I’m getting scared by the cannabis industry from the stories I’m hearing from people in that industry.

Many things are recognize as soft fraud but they're legal. Share on X

Look at what’s going on with the people getting tainted vape from the street. There’s no question that I think this technology can help in the track and trace area and that’s where it’s taken off. I’m not surprised that it’s taken off those supply chain provenance businesses because it is technology that can help in that regard. That is enterprise. You don’t need the truly decentralized systems for that. In the financial services industry. I give you the Dole Food case. It was a Delaware court case in 2017. Another example of this, just to give you an idea that this is ongoing is the Uber IPO. The Uber IPO made a lot of headlines because it traded so poorly in the aftermarket. It’s a terrible IPO.

A lot of investors lost a lot of money. I think the stock was down 20% on the first day. I worked in the equities business for a long time. I worked on big IPOs. IPOs generally didn’t do that. They didn’t blow up like that. My question was why are they blowing up like this all of a sudden? These big IPOs are trading so poorly in the market. There’s an answer. That is that the SEC in 2017 allowed the investment banks in underwritten transactions to sell more shares in the offering that are legally issued in outstanding. It’s called Naked Short Selling. It’s the same thing we’re just talking about. I am shocked at this. Because the SEC is supposed to be a consumer protection industry and yet that is evidence, exhibit a: They are captured by the industry. This is something that the industry wanted because IPOs are risky. That used to put a lot of discipline on the underwriters to not overprice them so that they didn’t trade down to the secondary market. Because if they did, the investment banks lost their shirts. It was a high risk, high reward business. Every once in a while, they’d lose their shirts, but in almost all IPOs, the stocks traded up. That’s why the market works.

Since the SEC is allowing the three-card Monte game to be happening, if it’s heads, I win, if it’s tails, I win for the investment banks. The consumers are the ones who lose. What’s interesting is when I was digging into Wyoming, I sat down with the president of the center who was an attorney and he said, “There’s a Supreme court case about this in Wyoming.” I said, “What?” He laid it out there. Sure enough, there was a guy convicted of criminal fraud for re-hypothecating an industrial diamond. Re-hypothecation is taking an asset, pledging it for a loan and then taking the same asset and pledging it for a different loan.

That is standard practice in the bond market, especially US treasuries. The average US Treasury is claimed by three different people, but there’s only one US Treasury, three-card Monte, musical chairs, whatever you want to call it. In Wyoming, there’s a Supreme court case litigated all the way up to the Supreme Court that says, “If you do that, you’ve committed criminal fraud.” It was a felony for this guy because it was worth more than $10,000. I’m waiting for a state because most state fraud laws consider all the things you and I’ve just been talking about to be a fraud, yet it’s very rarely prosecuted. I’m waiting for a state to go out and prosecute in the financial services industry because it is right for prosecution. In some states, the attorney general is going to make a name for him or herself by doing this. Good on them for doing it because that will be standing up for the rights of the little guy and mom and pop. Ultimately, frankly, we should all stand for honest ledgers. Why are we tolerating dishonesty in bookkeeping systems?

I agree with you. I also think it’s interesting that you guys are already having tests of the entities of the laws of the things that are going into place. Because at the end of the day, I think that’s where for some people, limited liability companies started falling apart. I had an LLC in Rhode Island back in 2000. It was a little bit earlier that I formed it. We moved to New York state and it just destroyed everything that we had set in place and we should have incorporated because New York state, they had too much precedent set in within the state of how they treated the members. It essentially messed with our corporation and messed with our company.

NTE 56 | Wyoming Blockchain

Wyoming Blockchain: There are bugs in the laws just like there are in the code. You don’t want to screw it up because the downside of screwing it up is going to cost you more to fix it later.


I wished I had understood that but who would’ve known that these things were going through. You form it and then you are always working with the company that you formed, especially when you move states. I should’ve gotten a new advisor and I didn’t know that and wished that we had incorporated it at that stage. Luckily we sold everything off and we were okay, but it messed with my numbers. You have to get testing happening. Testing of what the laws are working in and how they are built-in practice. I think you guys are already starting that at such an early stage and I think that’s important.

That’s where the case law comes into effect. It is important to get a good lawyer when you moved to New York. If you’d had a good lawyer, they probably could have saved you. Unfortunately, it’s the cost of doing business. Laws are complicated, just like code is complicated. There are bugs in the laws just like there are bugs in the code, but you don’t want to screw it up. Because the downside of screwing it up is it’s going to cost you more to fix it later.

One of the things I want to touch on before we go is your sandbox. I think most people don’t understand how critically important that is, but I’m always on the innovation edge of companies like starting up at the beginning of them. It’s so critically important when we’re reinventing practically everything to have a sandbox opportunity. I think having a fintech sandbox is brilliant because that’s where there are so many regulations and there are so many things going on. That is making it difficult for you to develop great technologies and innovation that is going to be of great benefit long-term in terms of our financial processing. That’s pretty cutting edge stuff that you have done there. Talk a little bit about how that comes about.

To my knowledge, nobody’s applied for it yet. Candidly, we were copying Arizona. We can’t claim credit for that one. A lot of what Wyoming’s done, we’ve been the first mover, but on that one, we weren’t. Arizona has had a few companies apply. Part of it is that Wyoming has such a light touch regulation anyway that we’re not like New York or California where the sandbox is probably more meaningful because there is not likely that heavy-handed regulation, to begin with, in Wyoming. What it does is it says pretty much with the exception of the consumer protection and fraud requirements, you can do anything in Wyoming as long as you let the regulator know who you are and what you’re doing. You’re probably going to have to post a surety bond. There’s a requirement in the law to do that just to make sure that you’re not a total fraudster. Once you do those things, you have a safe haven and a safe harbor for two years initially. It can be extended for a third year. The thought process there is that if there’s a new business that doesn’t currently comply with the law but is a good idea and is worth trying and it’s not going to rip off customers, if it’s that good of a business, then Wyoming’s probably to make it legal within two to three years anyway. Arizona I think only has a one-year sandbox. One year isn’t enough time.

That’s a little short in development.

Wyoming is being viewed effectively as a sandbox by the feds. Share on X

The other thing we did, which Arizona I believe didn’t is that we made it reciprocal with foreign government sandboxes. The UK has one and Bermuda has one. Bermuda reached out to us because they are also a very respected but light touch financial services regulated jurisdiction. I used to run a couple of Bermuda insurance companies, so I’m very familiar with Bermuda. The Bermuda Monetary Authority in insurance and reinsurance is truly world-class. It’s interesting, they’re making a play for blockchain as well. A company can string together businesses between the EU passport and through Bermuda and then the UK and then the US by going into these sandboxes.

I’ve interviewed a few fintech app companies and things like that. They chose to go straight out to another country. A good example of that is the coin that they’ve created and they’re trying to serve an underbanked and underserved community. She wanted to do it because she was seeing her family from Mexico trying to send money and trying to deal with this. She was seeing this happening and thinking that she wanted to serve her local community, but the regulations were just so strong. She couldn’t test out her proof of concepts. She couldn’t deal with the regulation. She couldn’t stay in business and deal with trying to change regulation at the same time. She chose to go out of the country. I think that’s a shame for us to be able to not find these new things that might be working in our community and being able to have the time and the commitment to changing those regulations overall and proving that our model will work and it’s safe and it’s not defrauding anyone. I love the idea that you guys are doing that whether it’s fintech or in any other area, a sandbox can be a very important proving ground and important to moving our innovation forward. I think there’s a lot to prove here in crypto and in blockchain. It needs a safe haven to do that in.

What’s interesting is Wyoming is being viewed effectively as a sandbox by the feds. They are not shutting down what Wyoming is doing in the banking industry. The special-purpose depository institutions, the Wyoming bank regulator has done extensive work with the Kansas City Fed. They’re pretty certain to approve an application. Nothing is certain until somebody shows up and applies. They even commented on the statute before it was enacted into law. They’ve been a partner of the Wyoming banking division and what they’re doing effectively is saying, “We’re going to let Wyoming do this and we’re going to watch and we’re going to see if this works.” If it does work, I heard a number. It didn’t come from the fed, but it did come from a regulator in DC who said, “If this works in three to five years, we may loosen the federal regulations.” It’s not official that Wyoming a sandbox for all the banking and payment stuff because we’ve not been given that title de facto, but that’s what is happening here.

Everything that Wyoming is doing though, it complies with the federal law. It’s not like we need an exemption from federal law. Maybe that isn’t an apt analogy because we don’t need any exemptions. State-chartered banks have been around for more than a century and there’s good federal law about how other states have to respect other state’s state-chartered banks. Wyoming state-chartered banks will end up obviating the need for a bit license in New York. Nobody has tested this yet, but there’s a very good reason to believe that that’s the case. It’s because chartered banks have been around a long time. There’s a lot of precedents and law.

Caitlin, your energy and your excitement about this space just to get to me every time I see you. How can someone find out more information and follow what’s going on because things are changing every day? You’re getting new rulings happening and things are going on. Where can we follow that and where can we find out more?

NTE 56 | Wyoming Blockchain

Wyoming Blockchain: Open-source developers often use pseudonyms because they’re afraid of the criminal and civil liability for the code being misused.


I’m very active on Twitter. That’s probably the best place for the day-to-day. I also have a pinned tweet that has a link to a Forbes.com article I wrote that summarizes the Wyoming legislation if you’d like to start there. Caitlin-Long.com is a blog that I post articles on. I’m working on a book, although I have no idea when that will get done. In the meantime, check me on social media. I’m also pretty active on LinkedIn.

Caitlin, is there anything on the forefront, anything on the future, anything that you’re excited about what might be coming up that you’d want us to watch for?

We have seven more bills that we’ve proposed for the 2020 legislative session. They’ve got to wind their way through a long process. A couple of them are interesting. One is that if your private keys are in Wyoming, then a judge, whether it’s criminal or civil or administrative, cannot compel you to disclose your private keys. That’s one proposal. They can compel you to move the assets. They can compel you to sign digitally to prove you own something, but they cannot compel you to reveal your private keys. We acknowledge the private keys are not like a regular password. Once you reveal them, they’re permanently compromised. They probably unlock a lot more assets than a divorce settlement might.

Somebody might be entitled to in a divorce settlement, for example. Compelling the actual release of the private key is something that we wanted to protect. That’s going to be a controversial one. I’m not sure we’re going to get it through. That truly plants a flag in the sand that Wyoming is protective of this industry. The second one is for developers, along those lines. We passed a bill through the task force that says you cannot be criminally charged merely for writing a line of code in the State of Wyoming. If you are maliciously using your code or somebody else’s code, you can still be criminally charged, but merely writing the code, it’s protected speech effectively in the State of Wyoming. You can’t be criminally charged for it.

That one got a very loud round of applause from developers. Open-source developers so often use pseudonyms because they’re afraid of mostly criminal, but also civil liability for the code being misused. What we’re trying to do is just plant the flag. The state that gets it and this is the place where you want to be. This is the place where you want to set up your business. We’re going to treat you the best. After 29 years, I moved back here to Wyoming. I truly believe there’s more opportunity for the financial technology sector here in Wyoming than there is in New York for sure.

I don’t blame you at all. The countryside is beautiful there. I think most people don’t realize how close big cities in Colorado are as well across the border. There are all kinds of things to think about and look about, whether you want to domicile there. Start banking there and what you’re going to do with it and with how you’re going to organize your business and what you’re going to do. Caitlin, thank you so much. I’m glad that we finally got a chance to connect. I’m glad the readers have gotten a chance to know all the excitement about what’s going on in Wyoming and we will keep in touch. When some new things come on, we’ll be sure to notify the audience and maybe do another one in the near future.

I’d like that. Thank you very much.

I am so glad that you are all thinking about the future because you’ve been messaging us. You’ve been talking with us on Facebook and Instagram at New Trust Economy and our website, NewTrustEconomy.com. You’ve been sending us questions and messages and we appreciate that and we look forward to bringing you interesting new topics and interesting new people like Caitlin.


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About Caitlin long

NTE 56 | Wyoming BlockchainCaitlin Long is a 22-year Wall Street veteran who has been active in bitcoin and blockchain since 2012. She has been leading the charge to make her native state of Wyoming an oasis for blockchain companies in the US, where she helped Wyoming enact 13 blockchain-enabling laws in 2018 and 2019.

From 2016-18 she jointly spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain start-up. Caitlin ran Morgan Stanley’s pension solutions business (2007-2016), held senior roles at Credit Suisse (1997-2007) and began her career at Salomon Brothers (1994-1997).

She is a graduate of Harvard Law School (JD, 1994), the Kennedy School of Government (MPP, 1994) and the University of Wyoming (BA, 1990).


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