With help from Tyler Lindholm, Wyoming has quickly become a leader in the blockchain world. But he lost his reelection bid during the primary.
The Wyoming Banking Division approved the state’s first charter for a company to begin banking with cryptocurrency this week, marking the nation’s first approval of a new type of bank charter in more than 40 years.
By a unanimous vote Wednesday morning, the Wyoming Banking Board granted the cryptocurrency company Kraken the state’s first ever charter as a special purpose depository institution, allowing the company to begin offering financial services for users of cryptocurrencies — digital, encrypted forms of currency — in everyday life.
“We’re thrilled to work in a state so aligned with our philosophy and values,” David Kinitsky, CEO of Kraken Financial, said in a statement. “Wyoming is a rare and shining example of how thoughtful regulation can drive innovation for FinTech companies.”
The institution — legalized by a piece of 2019 legislation spearheaded by Rep. Tyler Lindholm, R-Sundance — will be the nation’s first and will soon allow both consumer and commercial-level services to anyone looking to bank using cryptocurrency without the use of third-party services.
With help from Tyler Lindholm, Wyoming has quickly become a leader in the blockchain world. But he lost his reelection bid during the primary.
Though its services will be limited in an effort to reduce competition with community banks — lending will not be permitted, for example — the charter will allow Kraken to offer clients the means to close real estate deals or to engage in wire transfers and other services traditionally within the realm of traditional banks, and it could potentially make cryptocurrency a more accessible medium for consumers.
But it also establishes Wyoming as a leader in the nation’s cryptocurrency markets and lays the groundwork for the state to become a key player in international markets. According to a blog post by Kraken on Wednesday, the company hopes to roll out its banking services globally, though it will initially limit cryptobanking to U.S. consumers exclusively.
Though Long emphasizes her pursuit of the application is fulfilling a necessary need for an industry she has helped get on its feet, the optics of an industry insider who played a key role in building state regulations from scratch now standing to profit from that work are rather glaring.
“I’m excited that this day has finally arrived,” Gov. Mark Gordon said in a statement. “I’m proud that Wyoming is leading the way in digital assets and built the framework for this historic announcement to occur. This puts into practice what Wyoming saw as an opportunity to meet the challenges of a digital economy and allow businesses a way to hold digital assets safely.”
While it’s the state’s first special purpose depository institution, or SPDI, Kraken will not be its last. WyoFinancial, a venture backed by former Austin, Texas, resident Jeremy Drzal, is looking to make its own inroads into the state, while Avanti Financial — a company spearheaded by former Wall Streeter and Cheyenne crypto advocate Caitlin Long — is in the process of finalizing its application and is expected to have a hearing of its own in the near future.
Cryptocurrency can do a lot of things.
While an important milestone for the company, Kraken still needs to obtain the approval of the Federal Reserve to officially begin operations, which Kinitsky said should not be a challenge in an interview with the Star-Tribune on Wednesday morning.
Though there were some initial concerns with the viability of Kraken’s application with the state after allegations that company leadership had falsified addresses on business records filed in California last December, state regulators told the Star-Tribune they had been granted access to the company’s financials and saw no cause to reject the company’s application.
Kinitsky said Wednesday that he does not believe the lawsuit will have any effect on its application with the Federal Reserve.
“We’ve been forthright with all of the relevant documents and relevant regulators, and everyone has been satisfied,” Kinitsky said.
A company in line to open one of Wyoming’s first cryptobanks has been accused of falsifying addresses on their banking applications in California, potentially jeopardizing their plans to do business in the Equality State.
In the meantime, Kraken is moving quickly. Kinitsky said it plans to begin phase one operations shortly, with a target date of March 1 to begin offering some limited services.
Though a physical location in Cheyenne is not yet finalized, Kinitsky — who recently completed a move to Cheyenne — said the company will likely have one established in the near future and begin hiring anywhere between 10-25 employees in the region.
Services will likely resemble the company’s current offerings in year one of operations, Kinitsky said, with plans to expand offerings on the retail and institutional side in years two and three, including cryptocurrency debit cards, wealth management services and others.
The company also sees an opportunity for future partnerships with the traditional banking sector to serve “as a bridge” between the two sectors and potentially allow community banks to offer digital asset services to their customers.
“That could be a massive opportunity for us,” Kinitsky said.
Nearly twice as many spectators will be allowed to attend this year’s Oil Bowl, the showdown between the Natrona County and Kelly Walsh high school football teams, thanks to a variance order approved by health officials.
Under state health orders, attendance at football games — and any other outdoor event — would be capped at 1,000 people (or 50% of the stadium’s capacity). For the Oil Bowl, that number will now be 1,800. The Natrona County School District will require attendees to wear masks and socially distance. Attendees will have to request tickets ahead of time (they’re still free); a district spokeswoman said Wednesday that all tickets for the Oil Bowl have been distributed.
“We know that extracurricular activities are incredibly important to the overall success and celebration of students and their accomplishments,” school district spokeswoman Tanya Southerland said in a statement. “Extracurricular activities, events, and opportunities are designed to further the educational development of students through participation and exploration while teaching us all valuable life lessons that prepare us for the challenges and successes we face in life.”
The district reopened two weeks ago and has identified a handful of cases, none of which have prompted widespread quarantines or closure orders. Some high school athletic events elsewhere in the state have already been canceled or rescheduled — a game between Buffalo and Newcastle, for one — but fall sports overall are slated to continue largely as normal.
Attendees at football games will be required to wear masks, just as students and staff within the school buildings themselves are required to when social distancing isn’t possible.
The limitation on attendance at athletic — and other — events is in place because of state health orders. Officials have indicated they’d like to rid the state of those orders if the virus’ spread slows in the coming two weeks, though it’s unclear if removing the orders will change how K-12 schools and their athletic departments approach their day-to-day and weekend-to-weekend operations.
WASHINGTON — Openly contradicting the government’s top health experts, President Donald Trump predicted on Wednesday that a safe and effective vaccine against the coronavirus could be ready as early as next month and in mass distribution soon after, undermining the director of the Centers for Disease Control and Prevention and calling him “confused” in projecting a longer time frame.
Trump also disagreed with Dr. Robert Redfield about the effectiveness of protective masks — which the president recommends but almost never wears — and said he’d telephoned Redfield to tell him so.
Earlier in the day, the CDC sent all 50 states a “playbook” for distribution of a vaccine to all Americans free of cost when one is proven safe and effective — which is not yet the case. Redfield told a congressional hearing that health care workers, first responders and others at high risk would get the vaccine first, perhaps in January or even late this year, but it was unlikely to be available more broadly, again assuming approval, before late spring or summer.
Redfield, masked at times in a Senate hearing room, spoke emphatically of the importance of everyone wearing protective masks to stop the pandemic, which has killed almost 200,000 Americans.
“I might even go so far as to say that this face mask is more guaranteed to protect me against COVID than when I take a COVID vaccine.”
Trump, who has strongly recommended all year that restaurants, stores and cities in general “reopen,” mentioned on Tuesday that waiters struggle with their face coverings and do not like them.
CDC sent a planning document on Wednesday to U.S. states, territories and some big cities. Adding to logistical complications, vaccines likely will have to be given in two doses spaced weeks apart and will have to be refrigerated.
Redfield said states are not ready to deal with the demand for such a distribution and some $6 billion in new funding would be needed to get the nation prepared.
Earlier Wednesday, Trump parachuted into the coronavirus aid debate, upbraiding his Republican allies for proposing too small of a relief package and encouraging both parties to go for a bigger one that would include his priority of $1,200 stimulus checks for most Americans.
But his top GOP allies — who worked for weeks with the White House to construct the very aid package Trump criticized — shrugged off the president’s mid-morning tweet.
All the key players in the entrenched impasse over a COVID-19 rescue package instead focused their energies on finger-pointing and gamesmanship, even as political nervousness was on the rise among Democrats frustrated by a stalemate in which their party shares the blame. There remained no sign that talks between the White House and congressional Democrats would restart.
The smaller bill from Senate Republicans that Trump criticized did not include $300 billion for a second round of Trump-endorsed stimulus checks, which the White House said is a top priority.
Meanwhile, a drug company said Wednesday that partial results from a study testing an antibody drug give hints that it may help keep mild to moderately ill COVID-19 patients from needing to be hospitalized. Eli Lilly’s results have not yet been published or reviewed by independent scientists.
The drug missed the study’s main goal of reducing the amount of virus patients had after 11 days, except at the middle of three doses being tested. However, most study participants, even those given a placebo treatment, cleared the virus by then, so that time point now seems too late to judge that potential benefit, the company said.
Other tests suggest the drug was reducing virus sooner, and the results are an encouraging “proof of principle” as this and other studies continue, Lilly said.
The entire vaccine enterprise faces continued public skepticism. Only about half of Americans said they’d get vaccinated in an Associated Press-NORC poll taken in May. Since then, questions have only mounted about whether the government is trying to rush treatments and vaccines to help Trump’s reelection chances.
Redfield said that the “scientific integrity” of his agency’s reports “has not been compromised and it will not be compromised under my watch.” He also rejected questions about whether the CDC’s timeline for states to be ready for a vaccine by Nov. 1 was politically motivated.
“The worst thing that could happen is if we have a vaccine delivered and we’re still not ready to distribute,” Redfield told Senate lawmakers. “There was absolutely no political thinking about it.”
Sen. Patty Murray of Washington, the committee’s top Democrat, said political interference from HHS had damaged public trust in the government’s health information.
“The Trump administration needs to leave the science to the scientists immediately,” Murray said.
Democratic presidential nominee Joe Biden said while campaigning that he trusts what scientists say about a potential vaccine — but not Trump.
Biden has said he would take a vaccine “tomorrow” if it were available but he would want to “see what the scientists said” first.
The Trump administration delivered another blow to Wyoming’s oil refineries when the U.S. Environmental Protection Agency denied relief to several small operators struggling to meet biofuel standards this month.
Oil refineries across the country must blend a certain amount of plant-derived fuel into their gasoline product under a program called the Renewable Fuel Standard. When drivers go to refill their gas tanks in the U.S., chances are a bit of corn ethanol or soybean biodiesel is mixed in with the gasoline. But some refineries, including ones in Wyoming, have said the biofuel requirements are economically prohibitive. To offset the cost, many have applied for annual exemptions from the standards.
The EPA has historically extended what it calls “hardship relief” to these smaller operators struggling to meet the fuel standards. But recent decisions by the EPA and a federal court have placed that relief on the line.
The loss of access to such relief could have severe economic consequences on the facilities transforming crude into fuel in Wyoming, industry representatives said.
Sen. John Barrasso, usually a staunch supporter of the president’s agenda, delivered a rare rebuke of the Trump administration’s decision to deny hardship relief this week and leave the federal court decision unchallenged.
“The administration promised to protect small refineries. Today’s announcement by EPA breaks that promise,” Barrasso said. “It is one of many poor decisions, which have already contributed to the loss of one small refinery in my home state of Wyoming.”
HollyFrontier, a petroleum refinery based in Cheyenne, announced in June it would lay off 200 workers and transition to processing renewable fuels. The facility had functioned as a petroleum refinery for 86 years.
“If the administration doesn’t find an alternative means to provide relief quickly, our nation is likely to lose additional refineries,” Barrasso added. “That would be a disaster for American workers and the refineries that fuel our economy.”
In January, a panel of judges in the 10th U.S. Circuit Court of Appeals determined the federal government was overextending relief to refineries. The ruling effectively made exemptions from renewable energy standards for many small refineries inaccessible going forward.
The judge concluded the EPA — charged with managing the renewable energy standards program — had overextended its authority. Refineries that failed to apply for relief continuously each year, or were denied relief along the way, should not be entitled to relief moving forward, the judge ruled.
Despite pressure from Wyoming lawmakers and oil refineries, the EPA determined it would not request a rehearing of the federal trial. Oil refineries HollyFrontier and CVR Energy filed a petition urging the Supreme Court to review the Tenth Circuit’s decision.
Based on the court ruling and its own analysis, the EPA subsequently denied many ‘gap-filling’ petitions for the years 2011 to 2018 submitted by 17 small refineries asking for hardship exemptions.
According to EPA Administrator Andrew Wheeler, the decision “follows President Trump’s promise to promote domestic biofuel production, support our nation’s farmers, and in turn strengthen our energy independence.”
But Wyoming’s oil refineries disagreed.
“Small refinery hardship relief — just as Congress had planned — provides some reprieve to small refineries from the overwhelming and costly burdens of the (Renewable Fuel Standard) program,” Adam Suess, vice president of government and external relations for the Sinclair Companies, said in support of the refineries’ court filing. “Congress provided the potential for this relief because it predicted — quite rightly, we now see — that the RFS program would disproportionately affect small refineries.”
Sinclair Wyoming Refining Company’s 2018 petition for relief was denied and the company sued the EPA. The litigation is ongoing.
The expansion of irrigated cropland to produce corn ethanol and soybean biofuel has decimated native prairies and degraded habitats for wildlife, according to the National Wildlife Federation.
In 2005, Congress created the Renewable Fuel Standard. The program sought to lower greenhouse gas emissions by requiring companies refining or importing crude oil to incorporate certain types of biofuel, such as corn ethanol, into transportation fuel supply. These days, most American drivers purchase gasoline blended with some amount of biofuel when they fill up their tanks.
The EPA sets a renewable volume obligation for refineries to meet each year. To comply, oil refineries can blend biofuel into their gasoline and diesel fuel. But often that’s not enough.
In addition to blending gasoline with biofuels, they also turn to the open market to purchase credits, known as “renewable identification numbers,” to meet these standards.
When establishing the mandate, some lawmakers anticipated smaller operations would likely be hit harder than larger ones by the requirements.
Small refineries were therefore able to apply for exemptions from the program. Parties must demonstrate that meeting the biofuel standards would cause disproportionate economic hardship.
According to the statute, a small refinery is a company processing an average of fewer than 75,000 barrels per day. Compared to larger refining companies, smaller operations can face resource and capital constraints, according to refinery representatives.
Critics of the exemptions going to small refineries say the relief hurts ethanol producers’ and farmers’ bottom line. Biofuel standards have helped prop up demand for corn. Others, like the American Petroleum Institute, recommended the government not appeal the 10th Circuit ruling, saying the relief caused “regulatory uncertainty” for some refineries.
After the court decision, the cost of some renewable identification numbers, or credits, increased substantially. The steep price for compliance could cripple smaller refineries, according to Suess, of Sinclair Companies, and others in the refinery sector.
“We hope the President and EPA Administrator (Andrew) Wheeler feel a sense of responsibility when (Renewable Fuel Standard) compliance costs become even more untenable for refineries of all sizes,” the American Fuel and Petrochemical Manufacturers President and CEO Chet Thompson said in a statement. “The legacy of this Administration’s handling of (the program) will be fewer union refining jobs, facility closures, reduced U.S. refining capacity, and increased imports of foreign biodiesel.”
To Suess the Trump administration’s recent support of biofuels will likely shutter more of the nation’s smaller refineries and hurt consumers.
“(The Renewable Fuel Standard) will cost many people very good jobs, will lead to domestic energy insecurity and ultimately harm all American voters,” Suess said. “We’re moving towards a larger entitlement for the biofuels industry at the cost of the American consumer.”