Note to readers • This story is published with permission from WyoFile.com.
After years wooing the cryptocurrency and digital asset industry, Wyoming’s efforts were rewarded last month by one of the biggest players in the space.
Kraken — a multi-billion-dollar crypto company with over 2,200 employees and 15 million customers around the globe — announced it had officially moved its headquarters to Cheyenne.
“Wyoming may feel like one small town with really long streets,” Trevor Rutar, the Cheyenne-based head of Kraken’s banking venture, wrote on LinkedIn, “but it continues to punch above its weight in the future of finance.”
In a lengthy post on X, Kraken co-CEO Arjun Sethi praised the state for building the “most comprehensive and technically coherent legal framework for digital assets” in the country.
“This decision wasn’t about headlines or optics,” Sethi said. “It was about alignment.”
The company, which allows customers to securely trade cryptocurrencies and more traditional assets, opened a Cheyenne office over four years ago and has contributed hundreds of thousands of dollars to the University of Wyoming’s blockchain program. But the formal establishment of a Wyoming headquarters makes the company’s ties to the state “permanent,” Sethi said.
For the lawmakers and others who’ve led Wyoming’s yearslong effort to become a crypto hub, Kraken’s announcement is a big deal — particularly at a time when other states are beginning to vie for the industry’s business.
“For them [Kraken] to make this step now and kind of recognize and come to Wyoming, I just think it’s a really cool sort of validation of all the work that Wyoming has done,” said Matt Kaufman, a Cheyenne attorney and longtime member of the state’s blockchain committee.
Long-running pursuit
The digital asset space is best known for its volatile cryptocurrencies, like bitcoin and ether, and the massive gains and losses that can result from buying and selling them. But advocates, including those in Wyoming, see much broader potential in the underlying blockchain technology.
Blockchains are shared ledgers that allow transactions to be readily verified by all participants and, in theory, make it nearly impossible for the data to be tampered with or altered. Beyond tracking the transfers of digital tokens, supporters see a variety of potential uses ranging from supply chains, to electronic voting to making secure payments at a fraction of the cost of credit cards.
Believing that the technology would bring new jobs and other economic development, Wyoming lawmakers set out to become the home base for the digital asset industry in the same way that South Dakota became the hub for credit card companies.
Over the past eight years, state lawmakers dove into the topic and passed over 30 laws related to blockchain technology and digital assets — from setting up a framework for crypto-banks to making clear what happens to customers’ digital assets if a crypto custodian goes bankrupt.
“When we started, the large financial institutions were shunning digital assets with every fiber of their being. They loathed them,” recalled Wyoming Sen. Chris Rothfuss, D-Laramie, who co-chairs the Legislature’s Select Committee on Blockchain, Financial Technology and Digital Innovation.
But traditional players have since come around: juggernauts like Fidelity and Blackrock now hold billions of dollars worth of bitcoin on behalf of their clients; Amazon and Walmart are reportedly mulling the possibility of launching dollar-like cryptocurrencies known as stablecoins in an attempt to save “billions of dollars” in payment fees; and the state of Texas is preparing to buy $10 million worth of bitcoin as an investment.
“A bunch” of the top 10 players in the traditional financial services space are looking to get into crypto, Kraken’s other co-CEO, David Ripley, recently told CNBC. “And we’re having a lot of discussions with them on how we can help them pull that off.”
Incorporating versus arriving
With crypto having its moment in the spotlight, Wyoming leaders are hoping the state’s time has come as well. Steve Lupien, the director of UW’s Center for Blockchain and Digital Innovation, noted the state has been working to pave the way for the digital asset industry for a “long time” — since 2017.
“… Sometimes we’ve kind of said, ‘Gee, it shouldn’t be this hard. I wish it would happen faster,’” Lupien said. “But it’s starting to happen now.”
He said “thousands” of entities in the digital asset space have domiciled in Wyoming in recent years. Some, like Cardano blockchain founder Charles Hoskinson, have also built deep connections in the state. Other firms aren’t based here, but have people living and working remotely in the state.
However, in many cases, the only thing “Wyoming” LLCs and more crypto-focused decentralized autonomous organizations, commonly referred to as DAOs, do here is hire a registered agent to serve as their public face and pay the Secretary of State’s Office an initial $100 fee and then $60 annually.
Kaufman has spent 18 years helping people form companies in Wyoming, and he acknowledged that new filings don’t always mean new business in the state.
“But what I would say, in my experience, is one follows the other,” he said.
Many times, Kaufman said, a company that forms some Wyoming LLCs decides to do more, such as make a deal or open an office here. Between the state’s status as a leader for incorporations, a new chancery court dedicated to expeditiously handling business disputes and the ongoing work on digital assets, “it starts to move the needle to where people say, ‘OK, this makes more and more sense, and we’re going to go ahead and move,’” Kaufman said.
“Over time,” he said, “that momentum continues to build.”
