2020 Wyoming Statutes
Title 34 - Property, Conveyances and Security Transactions
Chapter 29 - Digital Assets
Section 34-29-103 - Perfection of Security Interests in Digital Assets; Control; Possession; Security Agreements; Location.

34-29-103. Perfection of security interests in digital assets; control; possession; security agreements; location.

(a) Notwithstanding the financing statement requirement specified by W.S. 34.1-9-310(a) as otherwise applied to general intangibles or any other provision of law, perfection of a security interest in virtual currency or digital securities may be achieved through possession or control, as applicable to the asset, consistent with W.S. 34-29-102(a). A security interest held by a secured party having possession or control, as applicable, of virtual currency or digital securities has priority over a security interest held by a secured party that does not have possession or control, as applicable of virtual currency or digital securities. Other provisions of law relating to priority of security interests, including priority of control over delivery, shall remain applicable.

(b) Before a secured party may take possession or control under this section, the secured party shall enter into a security agreement with the debtor. The security agreement may set forth the terms under which a secured party may pledge its security interest as collateral for another transaction. Consistent with W.S. 34.1-9-201(a), the security agreement shall be effective according to its terms between parties, against purchasers of collateral and against creditors.

(c) A secured party may file a financing statement with the secretary of state, including to perfect a security interest in proceeds from a digital asset pursuant to W.S. 34.1-9-315(d).

(d) Notwithstanding any other provision of law, including article 9 of the Uniform Commercial Code, title 34.1, Wyoming statutes, a transferee takes a digital asset free of any security interest two (2) years after the transferee takes the asset for value and does not have actual notice of an adverse claim. This subsection only applies to a security interest perfected by filing.

(e) As used in this section:

(i) "Control," when used in article 9, title 34.1, Wyoming statutes and this section, includes the following:

(A) A secured party, or an agent, custodian, fiduciary or trustee of the party, has complied with W.S. 34.1-8-106, including by means of a private key or the use of a multi-signature arrangement exclusive to the secured party or any substantially similar analogue;

(B) Use of a smart contract created by a secured party to comply with W.S. 34.1-8-106. As used in this subparagraph, "smart contract" means an automated transaction, as defined in W.S. 40-21-102(a)(ii), or any substantially similar analogue, which is comprised of code, script or programming language that executes the terms of an agreement, and which may include taking custody of and transferring an asset, or issuing executable instructions for these actions, based on the occurrence or nonoccurrence of specified conditions.

(ii) "Multi-signature arrangement" means a system of access control relating to a digital asset for the purposes of preventing unauthorized transactions relating to the asset, in which two (2) or more private keys are required to conduct a transaction, or any substantially similar analogue;

(iii) "Private key" means a unique element of cryptographic data, or any substantially similar analogue, which is:

(A) Held by a person;

(B) Paired with a unique, publicly available element of cryptographic data; and

(C) Associated with an algorithm that is necessary to carry out an encryption or decryption required to execute a transaction.

(iv) "Possession," when used in article 9, title 34.1, Wyoming statutes and this section, includes use of a private key, a multi-signature arrangement exclusive to the secured party or a smart contract, as defined in this subsection, or any substantially similar analogue. "Possession" shall also include delivery of certificated digital securities, consistent with W.S. 34.1-8-301(a).

(f) Perfection by possession creates a possessory security interest under W.S. 34.1-9-301(a)(ii) in virtual currency or certificated digital securities, based on the possessory nature of a private key or any substantially similar analogue, which may be tangible or electronic.

(g) For purposes of article 9, title 34.1 and this section, if collateral is required to be "located in a jurisdiction," a digital asset is located in Wyoming if the asset is possessed, controlled or otherwise held by a Wyoming bank, trust company or other custodian, the debtor or secured party is physically located in Wyoming or the debtor or secured party is incorporated or organized in Wyoming, based on the following factors:

(i) Whether a security agreement typically present in a possessory security interest exists, consistent with W.S. 34.1-9-201(a), including an agreement describing the possessory nature of a private key or any substantially similar analogue;

(ii) The choice of law in a security agreement, evidencing the intent and understanding of the parties relating to all potential aspects of a transaction, including waivers of litigation in jurisdictions other than Wyoming, access to the Wyoming chancery court and judicial economy; and

(iii) The relative clarity of the laws of other jurisdictions relating to a digital asset, consequences relating to unknown liens in those jurisdictions and the ability of a court to exercise jurisdiction over a particular digital asset.