The Montana Legislature has been grappling with many technological innovations during the 2025 session, including determining how to regulate the growing digital economy and this month saw the launch of new laws and committees focused on the digital space.
A new law, the Financial Freedom and Innovation Acttook effect in October, clearing the way for companies that issue network tokens to do business in Montana and guaranteeing the state auditor’s office the power to regulate the burgeoning industry and pursue bad actors.
The bill, Senate Bill 265, carried by Sen. Daniel Zolnikov, R-Billingsdefines a number of buzzwords in the digital asset space – such as network token, blockchain and decentralized network – in state law. It also provides the framework for using network tokens and the boxes companies must check to do business in Montana.
Under Montana’s new innovation law, companies that issue digital tokens — used to power decentralized services such as computing, data storage and media streaming, among others — can register with the commissioner’s office as non-securities assets, making Montana one of the first states to do so.
Zolnikov said network tokens have the ability to decentralize many sectors of the industry, essentially cutting out middleman businesses, which he said fits with the Montan philosophy.
“If you have new technology that is an exception to the rule, but you want to follow the rules, what do you do? » he said. “We finally gave them a regulatory path to follow. »
In a press release, Securities and Insurance Commissioner Jim Brown said the new law sets a path for “responsible innovation.”
“This law gives entrepreneurs the certainty they need while ensuring Montanans are protected. SB 265 strengthens both our business climate and our national reputation as a state that encourages innovation while striking the right balance,” Brown said.
Speaking to the Daily Montanan this week, Brown said one of his office’s primary roles is to protect Montana consumers from “fraudsters and bad actors.”
“Not just in insurance, but also in financial institutions, which includes digital currencies and anything related to blockchain,” Brown said. “…At this point in the world of digital currency, there is not much on Montana’s books regarding granting my office or the Attorney General’s office the authority to regulate companies or individuals who engage in this area.”
On the consumer protection front, Brown has advocated nationally for strengthening laws in the digital space. He recently joined securities regulators across the country in urging the federal government to move forward in regulating aspects of the digital economy, including giving states prosecutorial authority in the digital space.
In a letter sent last monthBrown and his counterparts at the North American Securities Administrators Association have called for changes to a proposed federal market structure bill that he says “is a gift to fraudsters” through limited actions states can take to investigate and charge crypto fraudsters.
The Association is also behind legislation called the Support Anti-Fraud Enforcement (SAFE) Act, which would strengthen state authority to prosecute fraud involving digital assets.
“We believe we have the power to pursue these bad actors,” Brown said. “I take very seriously the power of this office to pursue bad actors in order to protect consumers. …and we do not want to create a system where small bad actors slip through the cracks.”
Brown said that with the explosion of digital assets in recent years, his office has seen a parallel increase in fraudulent claims in the digital space.
Last year, his office received nine complaints of digital asset fraud, totaling more than $1 million. As of September this year, his office had already received 20 complaints, amounting to $3.1 million.
On Tuesday, Brown’s office issued a press release about an individual accused in Missoula County of defrauding investors, including several elderly Montanans, through a fraudulent cryptocurrency scheme.
According to the release, an Idaho resident and two unindicted co-conspirators created a “fund” of more than $1 million from investors allegedly invested in cryptocurrency.
The defendant is charged with six counts of elder abuse, securities fraud, operating a pyramid promotional scheme, and operating as an unlicensed securities dealer.
“By the end of the century, (blockchain technology and digital assets) will be so integrated into our economy and our way of life that people won’t even recognize how we operated financially in 2025,” Brown told the Daily Montanan. “While it’s exciting and I want to be at the forefront as a regulator and help support that, we have to maintain our ability to pursue bad actors. We can’t let the Wild West live here.”
Blockchain and Digital Innovation Working Group Holds First Meeting
On Monday, the members of the new group Blockchain and Digital Innovation Working Group met for the first time to discuss the state of regulation of cryptocurrencies and digital assets in Montana and how to stay competitive in the digital economy.
The task force, created during the 2025 Legislature, is made up of lawmakers, representatives from the state auditor’s and attorney general’s offices, and members of the public with experience in the financial or technology sectors.
Co-chair Sen. Gayle Lammers, R-Hardin, said he envisions the task force as “a big brainstorm.”
“A lot of people think of crypto when they think of blockchain, but it’s much more than that, much more than the financial aspect,” Lammers told the task force. “But it has implications in agriculture, fraud, chain of custody, record keeping – all kinds of things we could apply this baby to.”
One of the topics of discussion Monday focused on Wyoming’s approach to digital assets, which includes launching its own state-backed cryptocurrency.
“They certainly laid the groundwork for this,” Brown, a member of the task force, told the Daily Montanan. “We may not envision Montana being the issuer of a stablecoin, but we will look at a model of what has made Wyoming a leader in blockchain technology…we will look at how Montana can be an innovator like Wyoming, perhaps even going beyond what they have done.”
In future meetings, the working group will focus on educational sessions to understand the scope of the digital economy and identify specific topics to address, as well as examine how other states currently regulate blockchain and other digital technologies.
“I think we’re going to be able to come up with some really cool things here to make our lives easier and to protect the people of Montana,” Lammers said.
