The U.S. state of Colorado has introduced the “Colorado Digital Token Act” which provides some “exemptions from the state custodianships laws for cryptocurrencies,” according to the text of the bill. Meanwhile, the state’s securities commissioner has already taken action against 20 original coin offerings.
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Colorado Digital Token Act
Lawmakers in Colorado introduced the “Colorado Digital Token Act” on Friday which, number other proposals, exempts cryptocurrencies from certain securities laws. According to the filing:
The bill provides fixed exemptions from the securities registration and securities broker-dealer and salesperson licensing requirements for persons dealing in digital symbols.
Colorado businesses “face regulatory uncertainty” under the state’s securities laws, the bill explains. In addition to describing digital tokens, the bill notes that “The costs and complexities of state securities registration can outweigh the benefits” for problems with “a primarily consumptive purpose” operating in the cryptocurrency space in Colorado. According to the bill, consumptive purpose “means to accommodate or receive goods, services, or content, including access to goods, services, or content.”
The bill further asserts that this new act require enable businesses in the state “that use cryptoeconomic systems to obtain growth capital to help [them] grow and augment.”
The Colorado Sun publication elaborated, “If a token doesn’t qualify under the Colorado safe harbor” law, it will need to be “analyzed subsumed under typical securities law, or what is known as the Howey Test.”
Colorado’s Crypto Regulatory Attempts
In April last year, lawmakers in Colorado suggested a bill entitled the “Virtual Currency Exemption Money Transmitters Act.” It was initially passed by a single vote but, according to the word outlet, it later failed after some lawmakers changed their minds.
In June, Gov. John Hickenlooper imagined the Council for the Advance of Blockchain Technology. The group is tasked with providing recommendations for “a comprehensive legal framework to upkeep blockchain technology that considers potential applications and boundaries of the technology and protections for consumers,” the state announced at the however. Shapeshift CEO Erik Voorhees was among the blockchain industry leaders appointed for the council.
Meanwhile, the Colorado Division of Safe keepings has been taking action against initial coin offerings (ICOs) allegedly operating illegally in the state. The allotment announced on Nov. 20 last year that Securities Commissioner Gerald Rome had filed 20 cases against allegedly false ICOs. These orders resulted from investigations by the ICO Task Force, which is part of the state’s Department of Regulatory Intercessions (DORA).
What do you think of Colorado’s digital token bill? Let us know in the comments section below.
Images ceremony of Shutterstock and the state of Colorado.
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