- The Wyoming legislature correctly recognizes the revolutionary aspects of blockchain technology and is a first-mover in modernizing commercial law for blockchain assets.
- Although Wyoming deserves praise for addressing transactions dealing with blockchain assets, in many ways their amendments with respect to the perfection and priority of security interests in blockchain assets fall short.
Wyoming has taken the lead in updating its version of Article 9 of the Uniform Commercial Code to provide new commercial law for blockchain technology and virtual currency. Wyoming’s approach offers benefits to market participants looking to perfect a security interest in assets created through blockchain technology, but its revisions are far from comprehensive and do not integrate into existing commercial law norms with respect to the perfection and priority of security interests. This article will provide a brief overview and analysis of the amendments to Article 9 of the Wyoming Uniform Commercial Code with respect to perfection and priority and will highlight issues market participants may wish to consider prior to taking advantage of the Wyoming amendments.
In February 2019, the Wyoming legislature passed Senate File No. SF0125 (SF0125). Effective July 1, 2019, SF0125 amended Article 9 of the Wyoming Uniform Commercial Code (WY-UCC) to: (1) define digital assets that utilize blockchain and distributed ledger technology (such assets Blockchain Assets, and such technology Blockchain Technology); (2) classify Blockchain Assets under the perfection and priority regime; (3) establish special rules for perfection and priority with respect to such Blockchain Assets; and (4) provide a framework for banks to act as custodians with respect to Blockchain Assets (Blockchain Custodians).
The Wyoming legislature has recognized the importance of Blockchain Technology and the need to adapt existing commercial law to these new technological developments. Blockchain Technology is revolutionizing the financial services industry in many ways, affecting the issuance and exchange of digital securities and the transfer and maintenance of virtual currency, as well as recording evidences of indebtedness and the use of electronic documents of title. Wyoming is not alone in embracing new developments in Blockchain Technology; for example, Delaware and Maryland have recently amended both their general corporation laws and limited liability company laws to provide for the creation and maintenance of corporate and company records with respect to equity interests using Blockchain Technology, and financial institutions have begun negotiating and syndicating loans using Blockchain Technology. Wyoming is leading the way, however, in addressing Blockchain Technology’s impact on the attachment, perfection, and priority rules of Article 9 of the Official Text of the Uniform Commercial Code (UCC).
Overview of SF0125 with Respect to WY-UCC Article 9
SFR0125 amends the WY-UCC to provide four key elements: (1) a baseline set of definitions for Blockchain Assets; (2) classifications of Blockchain Assets as property under the WY-UCC; (3) rules outlining how perfection and priority of security interests under WY-UCC Articles 8 and 9 apply to Blockchain Assets; and (4) rules treating Blockchain Custodians as securities intermediaries under WY-UCC Article 8.
(a) Baseline Definitions with Respect to Blockchain Assets
SFR0125 creates a new defined term for Blockchain Assets called “digital assets,” which term is further divided into three subtypes: “digital security,” “virtual currency,” and “digital consumer asset.” “Digital security” means a digital asset which constitutes a security under Wyoming Statute section 17-4-102(a)(xxviii), but excludes virtual currencies and digital consumer assets. “Virtual currency” means a digital asset that is (1) used as a medium of exchange, unit of account, or store of value, and (2) not recognized as legal tender by the U.S. government. “Digital consumer asset” is a catch-all provision that includes a digital asset that is used or bought primarily for consumptive, personal, or household purposes and includes Blockchain Assets that would be “an open blockchain token constituting personal property” and any other digital asset that is not a digital security or a virtual currency. SFR0125 further provides that the terms “digital consumer asset,” “digital security,” and “virtual currency” are mutually exclusive.
(b) Classifications of Blockchain Assets as Property with Respect to WY-UCC
After providing baseline definitions for Blockchain Assets, SF0125 § 29-102(b) provides the general rule as to how the different types of Blockchain Assets are to be treated under WY-UCC Articles 8 and 9:
(1) Virtual currencies are considered money, notwithstanding the definition of “money” under WY-UCC Article 1, but only for the purposes of WY-UCC Article 9.
(2) Digital consumer assets are considered “general intangibles” under WY-UCC Article 9, but only for the purposes of WY-UCC Article 9.
Section 29-102(b) then provides for an opt-in provision (Opt-In) for financial asset treatment under WY-UCC Article 8 with respect to Blockchain Assets under the WY-UCC. A Blockchain Asset (note that this can be a digital consumer asset, a virtual currency or a digital security) may be treated as a “financial asset” as defined under Article 8 of the WY-UCC pursuant to a written agreement with the owner of the Blockchain Asset. If treated as a financial asset, the Blockchain Asset shall remain an “intangible personal property.”
(c) Perfection and Priority Rules with Respect to Blockchain Assets
In addition to providing property classifications for Blockchain Assets, SF0125 creates an overlay to the existing perfection and priority scheme under WY-UCC Article 9 with respect to Blockchain Assets, including, among others, the following provisions:
(1) Perfection of a security interest in a Blockchain Asset may be achieved through a new form of control pursuant to section 29-103(e)(i). A security interest in a Blockchain Asset perfected by control has priority over a security interest that is not perfected by control.
(3) A secured party may file a financing statement with the secretary of state to perfect a security interest in a Blockchain Asset, including to perfect a security interest in proceeds from such Blockchain Asset pursuant to WY-UCC § 9-315(d) (continuation of perfection in proceeds).
(4) With respect to a security interest in Blockchain Assets perfected by a method other than control, a transferee takes a Blockchain Asset free of such security interest two years after such transferee takes the asset for value and does not have actual notice of an adverse claim during the two-year window.
(5) Pursuant to section 29-103(e)(i), “control” of a Blockchain Asset means:
(a) a secured party, agent, custodian, fiduciary, or trustee of the party has the exclusive legal authority to conduct a transaction relating to a Blockchain Asset including by means of a private key or the use of a multi-signature arrangement authorized by the secured party; or
(6) Pursuant to section 29-103(f), “control” of a Blockchain Asset is equivalent to the term “possession” of a tangible asset and, pursuant to section 29-103(f), perfection of a Blockchain Asset by control creates a possessory security interest and does not require physical possession.
(7) A Blockchain Asset is located in Wyoming if the asset is held by a Wyoming custodian, the debtor or secured party is physically located in Wyoming, or the debtor or secured party is incorporated or organized in Wyoming.
Analysis of SF0125 with Respect to Perfection and Priority Rules under WY-UCC Article 9
SF0125 provides generally that a secured party may perfect its security interest in a Blockchain Asset by properly filing a financing statement or by control. Control is achieved by the debtor and secured party entering into a control agreement (Blockchain Control Agreement), and the secured party then taking control of the Blockchain Asset pursuant to section 29-103(e)(i) (Blockchain Control). A secured party perfected by Blockchain Control has priority over a secured party that does not have Blockchain Control, and the secured party perfected by Blockchain Control is deemed to have a possessory security interest. A Blockchain Asset subject to a security interest perfected by filing (but not control) is “taken free” of any security interest in such Blockchain Asset by a transferee (a Blockchain Transferee) after two years if such Blockchain Transferee does not have actual, as opposed to constructive, notice of an adverse claim during such two-year window (Two-Year Rule). Additionally, a Blockchain Asset may be treated as a “financial asset” under WY-UCC Article 8 pursuant to an agreement between the owner of the Blockchain Asset and a securities intermediary, at which point the perfection and priority rules governing security entitlements in a securities account would apply (without reference to the new rules regarding Blockchain Assets) and perfection may be achieved through a traditional tri-party control agreement.
(a) Perfection in Blockchain Assets as “Digital Assets”
SF0125 implicitly contemplates the default UCC rule that a secured party may perfect its security interest in most types of personal property, including those types of which Blockchain Assets are comprised, by filing a financing statement, although it contains no special discussion of financing statement rules related to Blockchain Assets. The treatment of digital consumer assets as general intangibles and digital securities as securities under WY-UCC Article 8 (which are categorized as investment property under WY-UCC Article 9) leads to the interpretive conclusion that perfection may be achieved by properly filing a financing statement. One of the benefits of the perfection by filing system is that secured parties can rely on a filing regime to put third parties on notice of their secured claims without having to monitor subsequent transfers of a debtor’s assets. Under the Two-Year Rule, however, a Blockchain Transferee needs actual notice, as opposed to constructive notice (by UCC filing or otherwise), to avoid the two-year filing priority lapse. Therefore, if a secured party perfected solely by filing is unaware that a Blockchain Asset subject to its security interest has been subsequently transferred, then it runs the risk of becoming second in priority or even losing its security interest in such Blockchain Asset entirely. The Two-Year Rule is a new facet to the WY-UCC that has no analog elsewhere in Article 9 of the UCC, and the harshness of this rule incentivizes secured parties to perfect by control in order to protect against third-party claims to Blockchain Assets.
As discussed above, a secured party may perfect its security interest in Blockchain Assets by Blockchain Control. Section 29-103(f) provides that Blockchain Control creates a possessory security interest in a Blockchain Asset. Although SF0125 does not explicitly so state, it is reasonable to conclude that the intent of SF0125 is to provide that a security interest in Blockchain Assets perfected by Blockchain Control is to be governed by the sections of WY-UCC Article 9 that pertain to possessory security interests. As such, a secured party perfected by Blockchain Control:
(2) is perfected if a person, other than the secured party, has Blockchain Control and that person authenticates a record acknowledging that it holds the Blockchain Asset for the secured party’s benefit;
Pursuant to WY-UCC § 9-207, a secured party perfected by Blockchain Control will also be required to exercise reasonable care with respect to such Blockchain Asset (among other duties as specified in WY-UCC § 9-207).
As stated previously, the Two-Year Rule incentivizes secured parties to perfect their security interests in Blockchain Assets by Blockchain Control. However, because Blockchain Control creates duties of reasonable care on the part of a secured party exercising Blockchain Control, which could impose additional liability on a secured party, secured parties may want to take the additional step of utilizing a Blockchain Custodian to achieve Blockchain Control. A bank meeting the Blockchain Custodian requirements of WY-UCC § 29-104 will also meet the requirements of the definition of a securities intermediary, thereby gaining the benefits afforded to a securities intermediary under WY-UCC Article 8. A bank, excluding national banks, having a place of business in Wyoming and offering custodial services under WY-UCC § 29-104, is subject to specified custodial requirements with respect to maintaining Blockchain Assets. Those custodial requirements include obligations to accounting and internal control standards in accordance with applicable state or federal law; an obligation to maintain best practices relating to Blockchain Assets; and obligations to comply with anti-money laundering and beneficial ownership requirements. In addition, a bank acting as a Blockchain Custodian is required to submit to independent audits conforming to 17 C.F.R. § 275.206(4) regarding the Blockchain Assets in its custody and to maintain control over such Blockchain Assets while in its custody as a bailment. Therefore, a secured party that has perfected its security interest through a Blockchain Custodian would have the benefit of a regulatory framework that both provides technological standards a Blockchain Custodian is required to maintain and clarifies the legal relationship between a Blockchain Custodian and the owner of such Blockchain Assets.
Pursuant to SF0125 § 29-102(b), and consistent with UCC norms, parties may agree to treat a Blockchain Asset as a financial asset as defined in WY-UCC Article 8 (Opt-In). This section is most likely intended to preserve the existing UCC constraint that allows debtors and secured parties to opt into the securities intermediation regime under WY-UCC Article 8, Part 5, whereby the debtor would be the entitlement holder of a security entitlement maintained in a securities account by a securities intermediary.
Perfection of security interest in a security entitlement may be achieved by filing or control pursuant to WY-UCC §§ 9-312(a) and 9-106, respectively. Perfection by control under WY-UCC § 9-106 is in turn governed by WY-UCC § 8-106, pursuant to which the financial asset is treated as an indirectly held security entitlement in a securities account through a securities account control agreement. If a secured party perfects by control, then its security interest has priority over security interests perfected by filing, and the collateral is taken clear of any adverse claims without notice. So long as the owner of the Blockchain Asset agrees, the Opt-In would apply to all Blockchain Assets, including digital securities, digital consumer assets and virtual currencies, effectively collapsing the three subtypes of Blockchain Assets into the single term “financial asset,” as well as removing the requirement for a separate Blockchain Control Agreement.
However, the unamended WY-UCC and UCC already allow for secured parties to opt-in to security entitlement treatment. The securities intermediary concept is well established under UCC Article 8 and is functionally similar to a deposit account bank. A debtor credits its financial asset to a securities account maintained with a securities intermediary, and the debtor and the secured party enter into a securities account control agreement whereby the securities intermediary agrees to comply with the entitlement orders of the secured party without further consent of the debtor. When the debtor credits its financial assets to a securities account with a securities intermediary, the financial assets become “security entitlements” and the debtor an “entitlement holder.” The securities intermediary concept reflects the commercial realities that financial assets are often held not by the owners themselves, but by intermediaries and clearing entities in order to reduce administrative burdens and create liquidity by increasing the efficiency of transfers in such assets. Like money held in a deposit account, the security entitlement is not the property right in specific financial assets, but rather the rights in the account of fungible assets maintained by the securities intermediary. As such, if the Blockchain Asset is a security entitlement, then control is achieved pursuant to the rules set forth in WY-UCC § 8-106(d)—the same rules that apply to any other financial asset that is a security entitlement. As outlined above, because debtors and secured parties can rely upon an existing control regime under the WY-UCC in place prior to SF0125, and because the rules governing Blockchain Custodians refer back to that same regime, the Opt-In provision appears unnecessary.
(c) Choice-of-Law Considerations for Secured Parties
SF0125 § 29-105 provides that the courts of Wyoming shall have jurisdiction to hear claims in both law and equity relating to Blockchain Assets, including those arising from the WY-UCC. Further, section 29-103(f) provides that a Blockchain Asset is located in Wyoming if the Blockchain Asset “is held by a Wyoming custodian, the debtor or secured party is physically located in Wyoming or the debtor or secured party is incorporated or organized in Wyoming.” These two provisions offer a jurisdictional hook in which secured parties may avail themselves of the WY-UCC, as amended by SF0125. If the Blockchain Asset is held by a custodian located in Wyoming, or either the secured party or the debtor is located or organized in Wyoming, then a secured party could avail itself of the benefits of the WY-UCC (as amended by SF0125) in a Wyoming court. However, regardless of the jurisdictional provisions in SF0125, courts, located in Wyoming or otherwise, may be unwilling to apply the WY-UCC as amended by SF0125 when adjudicating claims because of the choice of law rules found in the WY-UCC and UCC. For example, a judge in another state such as New York would begin a choice of law analysis by opening the New York version of the UCC, not the Wyoming version of the UCC. Further, a court may be subject to the mandatory choice of law rules in the UCC designed to protect third-party interests. As a result, secured parties may find their security interests in Blockchain Assets unperfected if a court does not apply Wyoming law.
The UCC, including the WY-UCC, has its own intricate choice-of-law rules, and the presence of a non-uniform provision in one jurisdiction does not require courts to recognize or defer to it. Section 9-301 of the UCC and WY-UCC provides that “except as otherwise provided in this section, while a debtor is located in a jurisdiction, the local law of that jurisdiction governs perfection, the effect of perfection or nonperfection, and the priority of a security interest in collateral.” When determining the location of a debtor, the UCC provides that:
(2) a debtor that is an individual is located at its principal place of residence; and
Therefore, when adjudicating a claim involving a debtor located in Delaware, for example, a court would look to the UCC in effect in Delaware, and not the WY-UCC. In applying the Delaware version of the UCC, a court would not apply the SF0125 provisions governing Blockchain Assets because no such provisions exist. If the secured party did not file a financing statement, then its security interest may be unperfected. A secured party located in Wyoming may argue that Blockchain Control (either its own or through a Wyoming Blockchain Custodian) creates a possessory security interest, and that UCC § 9-301(2), which provides that the law where the collateral is located governs, would apply. However, if the debtor is not located in Wyoming, then courts may find such argument unpersuasive pursuant to section 9-301(1). If the secured party has Opted-In with a properly executed securities account control agreement, and the security intermediary is located in Wyoming, then the WY-UCC may govern pursuant to section 9-305(a)(3), but as discussed above, secured parties can already opt-in to UCC Article 8 with respect to security entitlements under UCC Article 8.
The Wyoming legislature correctly recognizes the revolutionary aspects of Blockchain Technology and is a first-mover in modernizing commercial law for Blockchain Assets. Although Wyoming deserves praise for addressing transactions dealing with Blockchain Assets, in many ways their amendments fall short. SF0125 deviates from UCC norms with respect to control and perfection-by-filing, and highlights unresolved policy considerations with respect to the application of commercial law to Blockchain Assets. Ambiguities in the control-related provisions of SF0125 raise questions of how much “control” a secured party must have over a Blockchain Asset to call its security interest perfected. The Two-Year Rule attempts to balance the rights of a Blockchain Transferee and a secured party, but strips the effectiveness of a financing statement in ways that will trouble a typical commercial law practitioner. The end result of SF0125 is a Blockchain Asset overlay that may create ambiguities within the existing UCC perfection and priority regime. Further, because the Wyoming legislature has enacted a non-uniform UCC, there are legitimate questions as to whether other jurisdictions will recognize any Wyoming claims or even apply the WY-UCC when determining perfection and priority. As a result, rather than creating a forward-looking system, the Wyoming legislature has created a perfection and priority scheme in which secured parties may prefer to rely on the oldest form of perfection—a possessory pledge—or the very institutions that blockchain advocates seek to eliminate—intermediaries.
 The views expressed in this article are exclusively those of the author and do not necessarily reflect those of Sidley Austin LLP and its partners. This article has been prepared for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. The author thanks Teresa Harmon, T.J. Gordon, and Lilya Tessler of Sidley Austin LLP for their review and comments. The author also thanks Carter Isham for her help proofing and many read-throughs.
 Del. S.B. 69, 149th Gen. Assem.; Del. S.B. 183, 149th Gen. Assem. (2018); Md. S.B. 136, 2019 Reg. Sess. Gen. Assem.; Laura Noonan, Banks Complete First Syndicated Loan on Blockchain, Fin. Times, Nov. 6, 2018; Khatri, Yogita, Ex-SoFi CEO’s Startup Closes $1 Billion Credit Line on a Blockchain, Coindesk.com, May 10, 2019.
 This article will primarily focus on the amendments to WY-UCC Article 9. At times it will be beneficial to compare the WY-UCC to the Official Text of the Uniform Commercial Code. When referring to the Official Text of the Uniform Commercial Code, this article will use the designation “UCC”.
 SF0125 § 29-102(c). SF0125 provides extensive definitional language for what constitutes a Blockchain Asset and Blockchain Technology in general. This article will focus on the implications of amendments to the Article 9 perfection and priority regime. The definitional language with respect to Blockchain Technology will be addressed in a separate article at a later time.
 SF0125 § 29-101(a): “‘Digital Asset’ means a representation of economic, proprietary or access rights that is stored in a computer readable format, and includes digital consumer assets, digital securities and virtual currency.” The definitional and classification scheme of SF0125 leverages defined terms from different statutory regimes (e.g., the Wyoming Uniform Securities Act as discussed below) that do not readily fit into WY-UCC Articles 8 and 9. The definitional and classification scheme of SF0125 also raises statutory interpretation questions (e.g., whether the use of “includes” in the definition of digital asset should be read to mean that digital securities, virtual currencies, and digital consumer assets are the exclusive subcategories of digital assets or is meant to be exemplary).
 See Wyo. Stat. § 17-4-102(a)(xxviii) (Wyoming Uniform Securities Act) (definition of “security” includes, among other things, certificated and uncertificated securities, evidence of indebtedness, “investment contracts,” or “an interest or instrument commonly known as a ‘security’”, but pursuant to the recently passed Wyoming Utility Token Act (H.B. Wyo. Leg. No. 0062 (Feb. 2019) (Wyoming Utility Token Act)), effective July 1, 2019, does not include utility tokens (tokens maintained on an open blockchain whose predominant purpose is consumptive and not marketed to initial buyers as a financial investment)).
 Id. § 29-101(a)(iv) (emphasis added). Note that WY-UCC Article 9 and UCC Article 9 define money as “a medium of exchange currently authorized or adopted by a domestic or foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries.” See WY-UCC § 9-102(24) and U.C.C. § 9-102(24).
 Id. § 29-102(a). A token that is a security under the Wyoming Uniform Securities Act may not necessarily be a security under WY-UCC Article 8 (see WY-UCC §§ 8-102(15)(ii) & (iii)). Given that the definition of “security” under Article 8 is not co-extensive with the definition found in the Wyoming Uniform Securities Act, there is a potential gap of how to treat digital securities that are not “securities” under WY-UCC Article 8. SF0125 § 29-103(a)(ii) bridges this gap by providing that digital securities that are “securities” under the Wyoming Uniform Securities Act are classified as a “security” under WY-UCC Article 8 and “investment property” as defined in WY-UCC Article 9 “only for purposes of Articles 8 and 9 of the [WY-UCC]” (emphasis added).
 As discussed in more detail below, U.C.C. § 8-102(a)(9) (and the WY-UCC) already allows for debtors and secured parties to opt into Article 8 financial asset treatment without having to rely on the amendments provided for in SF0125.
 SF0125 § 29-102(b). Since “intangible personal property” is not a definition in the UCC, the term is presumably meant to conform to terminology used in the Wyoming Utility Token Act to make clear that digital consumer assets that are conducted on an open blockchain are non-physical personal property and not securities as defined in the Wyoming Uniform Securities Act.
 Id. § 29-103. A control agreement may include terms under which a secured party may pledge its security interest in the Blockchain Asset as collateral for another transaction. Note that the language contemplates a bilateral control arrangement between the secured party and the debtor. Control arrangements in deposit accounts and security entitlements contemplate tripartite agreements (see U.C.C. §§ 9-104, 9-106).
 Note that SF0125 § 29-103(e)(i) is missing a conjunction between subclauses (A) and (B). Thus, it is unclear if a smart contract is a necessary and sufficient factor or merely a necessary factor in establishing control. Judging from context, it is reasonable to conclude that SF0125 intended control to be attainable through “exclusive authority” or a smart contract.
 The bilateral control agreement concept is a departure from previous UCC Article 8 and 9 securities and account control agreements which contemplate a tri-party agreement involving the debtor, secured party and an intermediary with respect to assets held in an account. See U.C.C. §§ 9-104(a)(2) and 8-106(d)(2).
 As discussed below, this is most likely meant to clarify that WY-UCC Article 8, Part 5, which in part covers indirectly held intermediated securities and financial assets, may be applied to Blockchain Assets.
 See WY-UCC §§ 9-312(B)(3), 9-313. This issue is discussed further below. Omitting any specific guidance for perfection-by-filing leaves the status of virtual currency in doubt, given that particular digital asset is treated as money under Article 9, which may mean that perfection can only be achieved by possession.
 Id. § 9-320(e). An example of a purchaser of Blockchain Assets who would not have Blockchain Control would be a seller who executes a bill of sale for assets outside of the blockchain system to a purchaser.
 SF0125 § 9-102(c). For example, section 8-509(b) provides that: “to the extent that specific standards for the performance of the duties of a securities intermediary or the exercise of the rights of an entitlement holder are not specified by other statute, regulation, or rule or by agreement between the securities intermediary and entitlement holder, the securities intermediary shall perform its duties and the entitlement holder shall exercise its rights in a commercially reasonable manner.”
 Id. §§ 9-104(a), (b). Pursuant to section 9-104(p), “‘Bank’ has the meaning ascribed to it in W.S. 13-1-101(a)(i). W.S. 13-1-101(a)(i) (Banks, Banking and Finance) in turn provides that a “‘Bank’ means any corporation, excluding national banks, having a place of business within this state which engages in banking business.”
 SF0125 § 9-104(b). While SF0125 § 29-102(b) references the entire definition of “financial asset,” it is reasonable to conclude that Opt-In treatment means Blockchain Assets would be treated as security entitlements pursuant to section 8-102(9)(iii) of the WY-UCC. See WY-UCC § 8-102(a)(9)(iii): “any property that is held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the property is to be treated as a financial asset under this Article .”
 Such agreement, even though it only requires that the owner of the Blockchain Asset be a party, would, for practical reasons, be a tripartite arrangement between the debtor, the secured party, and a securities intermediary.
 Sections 9-312(a) & 9-106 govern rules for investment property, which includes securities entitlements and securities accounts. See WY-UCC § 9-102(a)(49). “Investment Property” means security entitlement and securities account.
 See U.C.C. § 8-102 cmt. 17 (“A securities entitlement means the rights and property interest of a person who holds securities or other financial assets through a securities intermediary”) and § 8-102 cmt. 7 (an entitlement holder is the person who holds the security entitlement).
 See id. § 29-103(f). “Wyoming custodian” is not defined, but it is not unreasonable to conclude that it would include both Blockchain Custodians and Wyoming entities that have not opted into the Blockchain Custodian framework provided by SF0125.
 See Arrow Oil & Gas, Inc. v. J. Aron & Co. (In re SemCrude L.P.), 864 F.3d 280, 291–92 (3d Cir. 2017) (determining that, under UCC § 9-301(1), because debtors were organized in Delaware and Oklahoma, the UCC in effect in Delaware and Oklahoma applied and therefore the security interest in the collateral at issue was unperfected, notwithstanding automatic perfection provisions under Texas and Kansas versions of the UCC).
A secured party and debtor may agree by contract in the security agreement to have the WY-UCC be the governing law; however, such agreement does not insulate them from third-party claims that the laws of a different jurisdiction would apply.
 Despite the qualifying lead-in language "except as otherwise provided in this section" found in UCC § 9-301(1), unless a court is already using the WY-UCC to conduct its choice of law analysis, such court with a non-Wyoming debtor may conclude that the UCC in effect in the debtor's location would apply, and not the WY-UCC. As discussed above, the Blockchain Asset definitions and related possessory security interests rules governing Blockchain Assets provided in the WY-UCC (as amended by SF0125) currently only exist in the WY-UCC. A court using the UCC of any other state would most likely categorize a Blockchain Asset as a "general intangible" for which perfection is achieved only by filing and not by possession. Accordingly, UCC § 9-301(1) (location of debtor) and not UCC § 9-301(2) (location of collateral) would govern the choice of law analysis of a court. See In re SemCrude, 864 F.3d at 291-292.
 See U.C.C. § 9-305(a)(3) (providing that the local laws of the securities intermediary’s jurisdiction govern perfection and priority of a security interest in a security entitlement or securities account).