Wyoming, and the margin is wider than most comparisons admit. Wyoming is the only state that clears all five tests that matter for an entity holding digital assets: charging order protection that reaches a sole member, a statutory limit on veil piercing, a digital asset framework of its own, no entity-level tax on a passive holder, and member names kept off the public filing. Every other state fails at least two.
Part of our guide: Wyoming Crypto LLC.
The short version
- Charging order protection has become table stakes. Delaware, Nevada, South Dakota, Texas and Wyoming all extend it to single-member LLCs by statute. Anyone selling Wyoming on that fact alone has not read the other states.
- Wyoming’s real edge is W.S. 17-29-304(d), which bars a court from weighing an entire category of facts in a veil-piercing analysis, and says so for single-member and multi-member companies alike.
- Wyoming is the only state that wrote its own digital asset law instead of adopting the uniform one. A classification statute, a statutory definition of possession that contemplates private keys, and bank custody rules, all enacted in 2019.
- Florida is the state to avoid for a single-member holding company. Under Fla. Stat. § 605.0503(4), a creditor who shows that a charging order will not satisfy the judgment in a reasonable time can foreclose on the whole membership interest.
- New Mexico offers the best filing privacy and no exclusivity language at all. Its charging order statute never uses the words “exclusive remedy.” That trade is real and it is usually sold backward.
- You do not have to live in Wyoming to form there. The protective provisions attach to the company and to a member’s transferable interest, and the state’s requirement is a registered agent with a Wyoming address. What an out-of-state owner has to supply is substance, which is a short and achievable list.
How I ranked these
These state rankings come from five tests, applied the same way to every state. Each has a statutory answer.
- Does a charging order stop a creditor when there is only one member? The remedy came out of partnership law, where its purpose was to keep a stranger with a judgment from being installed alongside people who never agreed to work with him. Remove the other owners and that purpose thins out, which is why courts in several states have allowed creditors to foreclose on a lone member’s interest anyway. Only express statutory language closes the gap.
- Has the legislature removed something from a court’s veil-piercing analysis? Most states leave alter-ego doctrine entirely to judges. A few have written down what a court may not weigh. Codifying the test without narrowing it does not count here, because a codified test is still the same test.
- Does state law address digital assets in their own right? Nearly every state that has acted did so by adopting Article 12 of the Uniform Commercial Code, a general commercial-law layer covering controllable electronic records. Writing a framework specific to digital assets is rare.
- Is there an entity-level tax that reaches a company doing nothing but holding assets? This is deliberately about the entity. Your own income tax follows where you live, which no formation state changes.
- Do member names appear on the public filings? The formation document and the annual report are separate disclosures and states differ on both.
Filing fees and annual costs are absent from the list on purpose. They are the smallest variable here and the one most likely to lead somebody to the wrong answer.
Where the tests disagree, test 1 breaks the tie, because it decides what happens when a creditor actually arrives. Test 2 breaks it next. That rule is applied consistently below, including where it produces an order I would not have picked by feel.
The comparison
| State | 1. Charging order | 2. Veil limit | 3. Digital asset law | 4. No entity tax | 5. Private filing | Score |
|---|---|---|---|---|---|---|
| Wyoming | Yes | Yes | Yes | Yes | Yes | 5 / 5 |
| South Dakota | Yes | Yes | No | Yes | No | 3 / 5 |
| Texas | Yes | Yes | No | No | No | 2 / 5 |
| Delaware | Yes | No | No | No | Yes | 2 / 5 |
| Nevada | Yes | No | No | Yes | No | 2 / 5 |
| New Mexico | No | No | No | Yes | Yes | 2 / 5 |
| Florida | No | Yes | No | Yes | No | 2 / 5 |
The numbered columns are the five tests above, and each state’s own section below gives the statute and the exact wording behind its marks. Three marks carry more than a yes or a no. A No in column 3 means the state adopted Article 12 of the Uniform Commercial Code and stopped there. New Mexico’s No in column 1 is silence: its statute simply never says exclusive remedy. Florida’s is the loud kind, because its statute expressly authorizes foreclosure against a single member.
Five states tie at two. Texas leads them because it is the only one that passes both protection tests. Delaware and Nevada each pass one, and they trade privacy against an entity-level tax, which is close to a wash. New Mexico and Florida fail test 1 and sit below all of them, with Florida last for the reason above.
One honest note about test 3 before the list. It is the weakest of the five for a plain holding company, for reasons the Wyoming section explains. I score it anyway, because it is the only test that measures whether a legislature has engaged with this asset class at all, and that turns out to predict the other four.
1. Wyoming
Wyoming was legislating for digital assets before there was a constituency asking for it, and the accumulated result is four separate acts.
Creditor protection that names the sole member. The operative language is narrower and better than the way it usually gets summarized:
“This section provides the exclusive remedy by which a person seeking to enforce a judgment against a judgment debtor, including any judgment debtor who may be the sole member, dissociated member or transferee, may, in the capacity of the judgment creditor, satisfy the judgment from the judgment debtor’s transferable interest or from the assets of the limited liability company. Other remedies, including foreclosure on the judgment debtor’s limited liability interest and a court order for directions, accounts and inquiries that the judgment debtor might have made are not available to the judgment creditor.”
Wyo. Stat. Ann. § 17-29-503(g)
Four other states now say something equivalent. This is where Wyoming’s reputation came from, and it stopped being the thing that separates Wyoming some years ago.
A statutory instruction to judges about veil piercing. This one is genuinely uncommon. Subsection (c) lists the four factors a court may weigh and states that no one of them, except fraud, is sufficient to impose liability. Subsection (d) then takes a category away entirely:
“In any analysis conducted under subsection (c) of this section, a court shall not consider factors intrinsic to the character and operation of a limited liability company, whether a single or multiple member limited liability company. Factors intrinsic to the character and operation of a limited liability company include but are not limited to: (i) The ability to elect treatment as a disregarded or pass-through entity for tax purposes; (ii) Flexible operation or organization including the failure to observe any particular formality relating to the exercise of the company’s powers or management of its activities; (iii) The exercise of ownership, influence and governance by a member or manager; (iv) The protection of members’ and managers’ personal assets from the obligations and acts of the limited liability company.”
Wyo. Stat. Ann. § 17-29-304(d)
Read that against how a veil-piercing argument is actually built against a holding company. The standard attack says the company is a formality, it elected disregarded treatment, one person controls everything, and its only purpose was to put assets beyond reach. Those are items (ii), (i), (iii) and (iv). Wyoming has told its courts they may not weigh any of them, and has said the rule applies whether the company has one member or several. Be precise about what that does and does not do: it is a limit on the analysis, and fraud, inadequate capitalization and true commingling all remain available to a creditor.
Digital assets classified as property, with the scope stated honestly. Wyoming divides digital assets into three mutually exclusive categories and then limits what the classification does:
“Digital consumer assets are intangible personal property and shall be considered general intangibles, as defined in W.S. 34.1-9-102(a)(xlii), only for the purposes of article 9 of the Uniform Commercial Code, title 34.1, Wyoming statutes”
Wyo. Stat. Ann. § 34-29-102(a)(i)
“Only for the purposes of” is doing a great deal of work in that sentence, and this is where most write-ups overreach. What the classification governs is how a security interest attaches and perfects, which matters to a lender taking your coins as collateral and to almost nobody else. Wyoming has not conferred some superior status on your holdings that your home state withholds, and none of this reaches federal tax treatment. I rank Wyoming first partly because its own statute is careful enough to say as much.
A statutory definition of possession that contemplates keys. This is the provision I would point to if I could point to only one, because it is the only place in American law I know of where a legislature has said what holding a digital asset means:
“‘Possession,’ when used in article 9, title 34.1, Wyoming statutes and this section, consistent with 34.1-9-313, means the ability to exclude others from the use of property, and includes use of a private key, a multi-signature arrangement exclusive to the secured party or a smart contract”
Wyo. Stat. Ann. § 34-29-103(e)(iv)
Possession defined as the ability to exclude, satisfied by a private key or an exclusive multi-signature arrangement. That is drafting by people who understood that ownership and control are separate problems. The same chapter goes on to authorize banks to provide custodial services for digital assets and requires the customer to elect in writing which custodial relationship applies to each asset.
Wyoming skipped the uniform rules on purpose. Every other state in this comparison addressed digital assets by enacting Article 12 of the Uniform Commercial Code, which arrived in 2022. Wyoming had legislated in 2019 and kept its own framework. Reasonable people differ on whether uniformity or specificity is worth more. What is not arguable is that Wyoming’s version says more about the asset, and Article 12 says more about how it fits the rest of commercial law.
Entity forms built for this asset class. Wyoming recognizes the DAO LLC under W.S. 17-31-104, which requires the articles to declare the form and carry a conspicuous “NOTICE OF RESTRICTIONS ON DUTIES AND TRANSFERS.” It later added a decentralized unincorporated nonprofit association form for groups not running a business at all, and amended that act again in 2026. Neither matters to a plain holding company. Both matter as evidence that the legislature keeps coming back to the subject.
No entity-level tax on a passive holder. Wyoming has no personal or corporate income tax. Its annual license tax is assessed on assets located and employed in Wyoming, and crypto held with a custodian elsewhere generally is not.
Member names stay off the filing. Wyoming’s Articles of Organization are required to state the company name and the address and agent at its registered office. There is no member roster, and the annual report is certified by the company’s treasurer or fiscal agent without naming members either. Say this precisely, because “anonymous LLC” is marketing language and what it actually means is narrower: your registered agent knows who you are, the IRS knows, and your bank knows under its customer identification obligations. Federal reporting obligations are set federally and have changed materially in recent years, so check them as they stand today. What Wyoming offers is that a member’s name is not published by the state on a page anyone can search.
2. South Dakota
South Dakota is the strongest state that nobody markets. SDCL 47-34A-504 makes the charging order the exclusive remedy at subsection (e), and subsection (g) states plainly that the section “applies to single member limited liability companies in addition to limited liability companies with more than one member.” Separately, SDCL 47-34A-303(b) provides that failure to observe formalities is not a ground for imposing personal liability, which is a real statutory limit on the analysis even though it is narrower than Wyoming’s. No income tax at any level.
It loses two tests. The annual report names members and managers, so ownership is public. And its digital asset law is the uniform Article 12 layer adopted in 2024, with nothing specific to the asset.
3. Texas
Texas passes both protection tests, which is why it leads the group tied at two. Since Senate Bill 2314 took effect in 2023, Tex. Bus. Orgs. Code § 101.112(g) confirms that the charging order provision “applies to both single-member limited liability companies and multiple-member limited liability companies.” Texas also limits veil piercing by statute: § 21.223, applied to LLCs through the limited liability company chapter, requires actual fraud committed for the defendant’s direct personal benefit before an owner can be held liable for the company’s contractual obligations. That is a genuinely high bar, and its reach is narrower than the Wyoming provision because it is framed around contract claims rather than around what a court may consider.
Texas then fails the other three. The franchise tax is imposed at the entity level, and the passive entity exemption is written for partnerships and trusts, so an LLC generally cannot use it however passive its holdings are. Texas is the one state here where an entity-level tax reaches a company that does nothing but hold assets. Manager and member information is public at formation and again on the annual public information report. There is no state income tax, which matters to a Texas resident and not to this ranking.
4. Delaware
Delaware has the most tested body of business law in the country, and 6 Del. C. § 18-703(d) forecloses the single-member question in exactly the terms you would want, extending exclusivity “whether the limited liability company has 1 member or more than 1 member.” Formation documents name only the entity and its registered agent, and there is no annual report listing members, so filing privacy matches Wyoming’s.
Two reasons it sits here. Delaware has no statutory veil-piercing limit, so alter-ego arguments run on common law with nothing taken off the table. And an entity-level franchise tax applies whether or not the company does anything. Delaware’s real advantage is a specialized business court and a deep bench of corporate precedent, and a wallet-holding company with one member will use neither.
5. Nevada
NRS 86.401 extends charging order exclusivity to a company with “one member or more than one member,” and there is no personal income tax. The state’s gross receipts regime does not reach an entity with no receipts.
Nevada fails test 2 on a technicality worth understanding. It has a statutory alter-ego test, which reads as protection but is a codification of the common-law test rather than a limit on it. Nothing is removed from a court’s consideration.
Its reputation for secrecy is also out of date, though the detail matters. Managers and managing members appear on both the initial list and the annual list. A member-managed holding company therefore puts its owner on the public record. A manager-managed one discloses the manager instead, which is a thinner form of privacy than Wyoming’s and depends entirely on who you appoint.
6. New Mexico
New Mexico is the honest answer to the question “where is filing privacy actually strongest.” The Articles of Organization require the entity name, registered agent and organizer, with no member or manager names, and the state has no LLC annual report requirement at all. Nothing to file annually means nothing published annually.
Then read the creditor statute. NMSA § 53-19-35 lets a court charge a member’s interest and says a charging creditor “has no more rights than those to which an assignee … would be entitled.” The phrase “exclusive remedy” never appears, and there is no single-member provision. New Mexico is frequently marketed to crypto holders on privacy while the absence of any exclusivity language goes unmentioned. Privacy from a public database and protection from a judgment creditor are different products, and this state sells the first one.
7. Florida
Florida is the cautionary case, and the reason the single-member question is test 1.
In Olmstead v. FTC, 44 So. 3d 76 (Fla. 2010), the Florida Supreme Court held that a court may order a judgment debtor to surrender all right, title and interest in a single-member LLC to satisfy a judgment. The legislature responded in 2011, and the provision now sits at Fla. Stat. § 605.0503(4). Read what it actually preserved:
“In the case of a limited liability company that has only one member, if a judgment creditor of a member or transferee establishes … that distributions under a charging order will not satisfy the judgment within a reasonable time, a charging order is not the sole and exclusive remedy … the court may order the foreclosure of the judgment debtor’s interest in the limited liability company.”
Fla. Stat. § 605.0503(4)
The fix restored exclusivity for multi-member companies and left single-member exposure in place, subject to that showing. Florida does have a formalities waiver in its LLC act, which is why it passes test 2, and that waiver addresses a different theory entirely and does nothing about this one. A Florida resident holding a large position through a Florida single-member LLC has the structure most likely to disappoint them.
Does a Wyoming LLC still work if you live somewhere else?
Yes, and this is the question I am asked most. Almost nobody who forms a Wyoming holding company lives in Wyoming. The provisions that carry the protection attach to the company and to a member’s transferable interest, and none of them asks where the member lives. Living elsewhere changes how much substance the entity needs behind it rather than whether Wyoming works at all.
Three things decide that, and all three sit within your control.
Residency is not part of the test. What Wyoming requires is a registered agent with a Wyoming address to accept service. Read W.S. 17-29-503(g) and 17-29-304(d) again with this in mind: both speak to the company and to a judgment debtor’s interest in it, and neither contains a residency condition.
A passive holding company usually registers nothing at home. A company that transacts business in your state generally has to register there as a foreign LLC and answer to that state’s filing regime. Most states carve passive holding out of what counts as transacting business, and Delaware writes that carve-out into its own statute, so a company whose only activity is holding assets in its own name usually stays outside the requirement. Usually is not always, and it turns on your facts.
Substance is what a court actually looks at, and it is a short list. The company has to hold the accounts in its own name, sign from wallets it controls, keep books, document contributions when they happen, and record decisions in the form the operating agreement calls for. That is the same standard the veil section describes, it is entirely achievable from any state, and it is the part people skip.
One question stays genuinely open, and it is the reason the third item matters. If a creditor obtains a judgment where you live, no decision I am aware of squarely settles whether that court must honor Wyoming’s exclusivity statute against a member domiciled elsewhere. Anyone who tells you the formation state always governs is stating a preference rather than a holding. What follows from that is practical: the stronger the company’s real connection to Wyoming and the cleaner its record, the better the position you argue from. Substance is how an out-of-state owner earns the statute, and it is worth building deliberately rather than reconstructing later.
What I actually see
People arrive having already chosen a state, wanting confirmation, and the state is rarely what decides how this turns out. The five tests above sort domiciles. They say nothing about whether the entity is real.
The pattern I would push back on is the holder who forms in Wyoming, never retitles the accounts, keeps signing from the same personal wallet, and believes the domicile did something. It did not. Wyoming’s veil statute takes missed formalities away from a court. It offers nothing when the company never held the assets, because that failure goes to ownership, and no legislature has written a cure for it.
The opposite error costs more and shows up later. Somebody spends three weeks comparing charging order statutes across seven states, forms in the best one, and never writes down who is authorized to sign or what happens when that person is unreachable. The domicile question has a right answer and takes an afternoon, while the access question has no default answer at all.
Where this goes wrong
The failure mode for a crypto holding entity is that the record and the reality drift apart, and nobody notices until somebody has to prove who owned what.
That got tested directly in Ruscoe v Cryptopia [2020] NZHC 728, where the New Zealand High Court decided whether exchange account holders owned their coins after the exchange collapsed. They did, and the deciding fact was bookkeeping. Account entries were maintained well enough that the court could name who was entitled to what, so holding the coins together in shared wallets took nothing away from the individual claims. Records nobody could interpret would have. Max Avery’s account of the judgment is the clearest write-up of what the court decided, and of why the usual summary gets it wrong.
Apply that to your own entity, in whichever state you pick. If the company owns the assets, the books should say so, contributions should be documented when they happen instead of reconstructed later, and the wallet the company signs from should be one the company controls. The test is whether a stranger reading your records after you are gone could work out who owned what without being able to ask you.
Common questions
Is Wyoming better than Delaware for a crypto LLC? For a holding company, yes. The two are close on creditor protection and identical on filing privacy. Wyoming adds a statutory veil-piercing limit and no entity-level tax, and Delaware has both gaps. Delaware’s advantages are corporate case law and its business court, which a single-member holding company will not use.
Do I have to live in the state where I form the LLC? No. You need a registered agent with an address there. Whether the company must also register in your home state depends on whether it transacts business there, and passive holding usually falls outside that.
Does forming in a no-income-tax state lower my crypto taxes? No. A single-member LLC is generally disregarded for federal purposes, so gains land on your return as before, and your home state taxes you as its resident whatever state the company was formed in. Domicile is an asset protection and governance decision.
Is an anonymous LLC actually anonymous? Not in the sense the phrase implies. It means a member’s name is not published by the state. Your registered agent, your bank and the IRS all know, and any federal reporting obligation is set by federal law, not by the state you chose.
Can I move an existing LLC to Wyoming? Usually, by domestication, if both states permit it. Whether that beats forming a new entity and transferring the assets depends on the tax and titling consequences of each. Ask your CPA before you file anything.
The decision rule
Pick Wyoming unless one of these is true:
- The entity will hold outside investors or issue equity classes, in which case Delaware’s case law starts to earn its keep.
- The LLC is being formed under a long-duration trust already sited elsewhere, in which case matching the trust’s jurisdiction may matter more than the LLC’s own statute.
If none of those apply, pick Wyoming and move on. The remaining work is the part that decides outcomes: whether the entity actually holds the accounts, whether the operating agreement says who may sign, and whether the records would survive being read by someone who cannot ask you what they mean. Choosing a state takes an afternoon. The rest takes longer and matters more.
Where this sits
The domicile is one of four decisions that have to agree with each other, and changing one usually breaks another. The state decides the rules your entity plays by. The custody setup decides who can move the assets. The records decide whether anyone can prove either of those after the fact. The estate documents decide what happens when the person holding it together is not available.
Most of the failures I see trace back to four reasonable decisions made separately and never reconciled. For an owner outside Wyoming that shows up in one specific way: the statute is available to anyone, and what decides whether it holds is the substance behind the entity, which is a short list that nobody assembles by accident. My team spends most of its time on exactly that, making sure the accounts, the titling, the operating agreement and the records line up with what the state and a court expect to see. If you would rather have all of it built to that standard from the start than reconstructed later, entity formation and titling is where my firm starts.
Sources
Wyoming publishes its statutes as whole-title PDFs, so the two Wyoming links below open Title 17 and Title 34 in full. Section-level pages are linked in the body where a specific provision is quoted.
- Wyo. Stat. Ann. § 17-29-503, charging order
- Wyo. Stat. Ann. § 17-29-304, liability of members and managers
- Wyoming Limited Liability Company Act and DAO Supplement, Title 17 (Wyoming Legislature)
- Wyoming digital asset statutes, Wyo. Stat. Ann. §§ 34-29-101 to 34-29-104, Title 34 (Wyoming Legislature)
- Delaware Limited Liability Company Act, 6 Del. C. § 18-703
- Nevada Revised Statutes § 86.401
- South Dakota Codified Laws § 47-34A-504
- Texas Business Organizations Code § 101.112
- Florida Statutes § 605.0503
- New Mexico Statutes § 53-19-35
- Uniform Law Commission, UCC Article 12 enactment map
- IRS, Single member limited liability companies
- IRS, Digital assets
- Wyoming Secretary of State, Business Division
Related
- Should I put my crypto in a Wyoming LLC?
- What is a Wyoming digital asset LLC?
- Wyoming LLCs for crypto
- Does moving crypto into an LLC trigger a taxable event?
- What records should a crypto LLC keep?
Last updated: 4 August 2026.
This article is general education, not legal, tax, or investment advice. Entity structures can reduce certain risks but do not eliminate them, and outcomes depend on your facts, your jurisdiction, and your documents. State law changes; verify any statute against its current text before relying on it. Talk to a qualified attorney and CPA about your own situation.
