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The U.S. state of Colorado has introduced the âColorado Digital Token Actâ which provides some âexemptions from the state securities laws for cryptocurrencies,â according to the text of the bill. Meanwhile, the stateâs securities commissioner has already taken action against 20 initial coin offerings.
Also read:Â Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations
Colorado Digital Token Act
Lawmakers in Colorado introduced the âColorado Digital Token Actâ on Friday which, among other proposals, exempts cryptocurrencies from certain securities laws. According to the filing:
The bill provides limited exemptions from the securities registration and securities broker-dealer and salesperson licensing requirements for persons dealing in digital tokens.
Colorado businesses âface regulatory uncertaintyâ under the stateâs securities laws, the bill explains. In addition to defining digital tokens, the bill notes that âThe costs and complexities of state securities registration can outweigh the benefitsâ for businesses with âa primarily consumptive purposeâ operating in the cryptocurrency space in Colorado. According to the bill, consumptive purpose âmeans to provide or receive goods, services, or content, including access to goods, services, or content.â
The bill further asserts that this new act will enable businesses in the state âthat use cryptoeconomic systems to obtain growth capital to help [them] grow and expand.â
The Colorado Sun publication elaborated, âIf a token doesnât qualify under the Colorado safe harborâ law, it will need to be âanalyzed under typical securities law, or what is known as the Howey Test.â
Coloradoâs Crypto Regulatory Attempts
In April last year, lawmakers in Colorado introduced a bill entitled the âVirtual Currency Exemption Money Transmitters Act.â It was initially passed by a single vote but, according to the news outlet, it later failed after some lawmakers changed their minds.
In June, Gov. John Hickenlooper created the Council for the Advance of Blockchain Technology. The group is tasked with providing recommendations for âa comprehensive legal framework to support blockchain technology that considers potential applications and boundaries of the technology and protections for consumers,â the state announced at the time. Shapeshift CEO Erik Voorhees was among the blockchain industry leaders appointed for the council.
Meanwhile, the Colorado Division of Securities has been taking action against initial coin offerings (ICOs) allegedly operating illegally in the state. The division announced on Nov. 20 last year that Securities Commissioner Gerald Rome had filed 20 cases against allegedly fraudulent ICOs. These orders resulted from investigations by the ICO Task Force, which is part of the stateâs Department of Regulatory Agencies (DORA).
What do you think of Coloradoâs digital token bill? Let us know in the comments section below.
Images courtesy of Shutterstock and the state of Colorado.
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