The legislation seeks to exclude cryptoactives and certain digital tokens from the laws that govern the concepts of values
Two legislators from Colorado, in the United States of America, presented this Friday, January 4th, a project that would allow exempting cryptocurrencies and certain tokens from the securities laws.
The main objective is to offer additional, but limited freedoms to some cryptocurrencies; this is because traders and local regulators complain about the illegitimate offers the industry presents.
It also seeks to eliminate the “regulatory uncertainty” that could curb the companies which offer markets for tokens and cryptocurrencies in order to raise funds through the use of cryptographic assets.
“The bill provides limited exemptions from the requirements of securities registration and licensing brokers for people who operate with digital tokens”, says a summary of the proposals.
Stephen Fenberg (Democrat) and Jack Tate (Republican) explained their project entitled “Colorado Digital Token Act”. The document explains that tokens stipulated mainly as consumption should be exempted from the statutes of securities laws since these tokens are not marketed for investment or speculation purposes.
The senators proposed the law in order to reduce the uncertainty surrounding the regulatory framework of digital currencies, and allowing token companies to raise funds using their cryptocurrencies.
The bill states that “the costs and complexities of the securities registry may outweigh the benefits”. Therefore, “this law will allow Colorado companies that use cryptoeconomic systems to obtain growth capital to help grow and expand their businesses, promoting the formation of local businesses and the creation of employment, helping to make Colorado a center for companies that are creating new platforms and decentralized Web 3.0 applications”, says the document.
According to the bill, the purpose of token consumption must be available in no more than 180 days of its sale. In addition, the initial purchaser will not be able to resell or transfer it until the purpose of consumption is available. In addition, the token’s issuer must indicate to the state securities commissioner his intention to conduct the transaction.
“The initial buyer provides a clear and conscious knowledge that he is buying the digital token with the intention of using it for a consumer purpose and not for speculative or investment purposes”, the project explains.
In December, two members of the US House of Representatives proposed a similar idea, called the “Token Taxonomy Law”. But “Colorado Digital Token Act” is one more step closer. It establishes limited exemptions from the registration requirements for securities, securities brokers and vendor licenses for people who handle digital tokens.
In addition, it was announced that, if a token does not qualify according to the Colorado Safe Harbor Act, it must be “analyzed according to the typical securities law, or what is known as the Howey Test”.
Regulatory Attempts in Colorado
Last April, Colorado lawmakers presented a bill entitled “Money exemption law for virtual money exemption”. The proposal received approval, but subsequently failed because some legislators changed their opinion.
In May, the Senate reversed a bill that clarified whether digital tokens were securities. In June, Governor John Hickenlooper created the Council for the advancement of Blockchain technology, in order to obtain recommendations for “a comprehensive legal framework to support blockchain technology”.
The new bill to exempt cryptocoins from some securities laws is currently under consideration by the Colorado Senate. Lawmakers seem hopeful that attitudes towards cryptocurrencies and blockchain technology continue to advance.
By María Rodríguez