Insights from the Wyoming Blockchain Symposium

As I touched down in Jackson, Wyoming last week, the spirit of its freedom-rich history was immediately palpable, as if the very sagebrush-laden air whispered of the rugged individualism that once defined this remote frontier town. Nestled beneath the towering Tetons, Jackson has long been a beacon of self-sufficiency, where the land's unforgiving beauty shaped a community of resilient pioneers. This enduring sense of freedom, woven into the very fabric of its landscape and culture, made Wyoming the perfect setting for hosting 250 of the most influential minds in the digital assets industry for the Wyoming Blockchain Symposium, convened recently by SALT with Kraken and the University of Wyoming, which I had the great pleasure to attend.

Wyoming has long been a pioneer in supporting digital assets. The state's Special Purpose Depository Institution (SPDI) charter, introduced in 2019, was designed to accommodate the growing demand for digital asset services, offering a regulated environment without subjecting banks to all traditional banking regulations. This innovation was recognized by Caitlin Long, a Wall Street veteran and Wyoming native, who founded Custodia Bank.

Her turbulent story represents a worthwhile lens into the current state of the industry. As a financial institution that embraced the SPDI charter early on, Custodia initially appeared well positioned. However, its charter application faced unexpected challenges when federal regulators, including the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, raised concerns about its operations. The denial of a necessary master account, which she characterized to me as a coordinated hit from the White House, highlighted how regulatory decisions can be blunted by bad-faith politics. 

So naturally, my journey in Wyoming began with politics, starting with an intimate gathering with U.S. Senator Cynthia Lummis (R-WY) at the foothills of Teton Village. Lummis has a pioneer's conviction that digital assets must be a strategic part of America's future. She confirmed that FIT21 and the overturn of SAB 121 were pivotal moments that shifted the regulatory center of gravity. The passage of a comprehensive crypto legislative bill this year is not “out of the cards,” she said, with sincere bipartisan support from U.S. Senators Kirsten Gillibrand (D-NY) and Majority Leader Chuck Schumer (D-NY). She emphasized the revival of discussions around the “Ancillary Asset Test” in FIT21 as crucial for establishing a workable market structure. These discussions involve potentially shifting regulatory oversight of select digital assets to the CFTC by creating a new commodities classification that falls outside the parameters of the Howey Test. This would facilitate trading and settlement of “ancillary assets” through CFTC-approved centralized exchanges, while the SEC would retain authority over “digital securities,” allowing for innovation while protecting market participants via necessary disclosures. Conversations with Chris Land, former General Counsel of the Wyoming Division of Banking, left me confident that dedicated legal experts are working to advance thoughtful regulations with free-flowing communication between the respective aides.¹

Later that afternoon, I had the opportunity to discuss the Bitcoin Act with Senator Lummis. The Bitcoin Act aims to establish a strategic Bitcoin reserve to strengthen America's balance sheet. Given that funds at the U.S. Department of the Treasury are primarily to be used for stabilizing currency markets and promoting global trade, I asked whether it would be prudent to pursue this strategy without considering its potential impact on the U.S.’s key trading (and financially repressed) partners like Japan. Senator Lummis, after noting that she’d never considered the question before, paused for a while before responding resolutely: “Energy is the answer. It has to be a part of the solution.” She pointed out that Japan and its East Asian allies face pressing challenges with sustainable energy, largely due to high dependency on imports and the difficulties of transitioning to cleaner sources. She believes that these nations, in addition to the U.S., should consider establishing a Bitcoin strategic reserve policy that could also serve as an impetus to developing much-needed renewable energy policies, which in turn support national security.

This was music to my ears (as someone all too familiar with air pollution problems in Korea). Plus, it just so happens that Wyoming knows a lot about energy. The state produces 12 times more energy than it consumes and ranks as the third-largest net supplier in the country (after Texas and Pennsylvania). Not only does Wyoming hold more oil and natural gas leases on federal lands than any other state, it also has the largest wind energy potential relative to its size.

Against this backdrop, CleanSpark’s recent announcement of plans to acquire two bitcoin mining locations in Wyoming with 75 MW worth of power underscores a unique historic opportunity. The properties, initially purchased by a Chinese-owned consortium before being scrutinized by the Committee on Foreign Investment in the United States for national security risks due to its proximity to a strategic missile base, highlights the profound convergence of  energy, security, and money.² Zach Bradford, CEO of CleanSpark, shared enthusiasm for other future projects as well, with another 45 MW site in Wyoming to come.

In closing, I'd highlight a few other key takeaways from the event: 

• In his opening remarks, Kraken CEO David Ripley reinforced two critical points: first, that the U.S. is lagging behind the rest of the world in adopting crypto-first technologies, and second, that the U.S. must put greater focus on the benefits of crypto adoption. 

• Over a bison steak dinner, Macro Santori, Chief Legal Officer at Kraken, echoed this sentiment, noting to me that the current market structure bill is biased to resemble the European Union's MiCA regulations.

• Former CFTC Chairman Chris Giancarlo emphasized the importance of the Digital Dollar Project, which is exploring a U.S. Central Bank Digital Currency (CBDC) through a model of public-private partnership (like the internet). 

• Flavia Naves, Commissioner at the Wyoming Stable Token Commission, is seeking a new public stablecoin model whereby stablecoin interest income will be redistributed to state schools. 

• Former SEC Chairman Jay Clayton stressed the need for clear stablecoin guidelines for both banks and non-banks. 

• Sovereign wealth funds in the Middle East are quietly accumulating Bitcoin, raising important questions about how the U.S. should integrate digital assets into its future roadmap.

As daunting as these developments may seem, it behooves us not to dismiss them, which brings me back to Senator Lummis. 

At one point during the conference, I discovered that Senator Lummis majored in Animal Science. And how appropriate, I thought as I left Wyoming: What else could describe what’s needed to navigate the wild unpredictability and partisan ferocity that is Washington D.C.? 

Wyoming, with its innovative crypto regulations and energy dominance, embodies the broader American spirit of innovation and self-reliance. “Wyoming people are independent by nature,” Governor Mark Gordon concluded. After a breathtaking mountain bike ride down a rock-strewn route dubbed Deepest, Darkest, I boarded my flight back to New York convinced that this state and its people, blessed with abundant resources, are natural trailblazers that could serve as a model for the nation. 

In hindsight, there could not have been a more perfect home for Bitcoin’s renaissance.

Notes:

(1) Chris was also the mastermind behind in-state DAO legislation in March 2024. It’s also worth noting Wyoming has a special legacy of financial innovation: It was the first state to authorize the creation of limited liability companies in 1977.

(2) Additionally, the convergence of AI and Bitcoin mining is a worthwhile note to briefly touch on. As many miners are exploring the reallocation of their energy capacity to the high-performance computing (HPC) sector, greater productivity gains are likely in the near future. The IREN team gave me a virtual walkthrough of their Prince George facility where NVDA H100 GPUs and Bitcoin mining ASICs are housed side by side. This setup allows for multiple monetization schemes, including HPC and GPU colocation opportunities. If we recognize AI's role in national security, we can then appreciate Bitcoin mining's dual mandate: technological growth security tied to monetary security.