In the US state of Colorado, two lawmakers have recently introduced legislation which looks to exempt cryptocurrencies like Bitcoin and Ethereum and other digital tokens from securities law.
Late last week, the Republican Jack Tate and the Democrat Stephen Fenberg both filed a bill called the “Colorado Digital Token Act”. This act proposes that digital tokens with the main purpose for consumption should be exempted from the securities laws. This will go ahead if they aren’t marketed for speculative or investment reasons.
As reported by CoinDesk, the end goal for this is to remove the “regulatory uncertainty” which could hold back companies offering marketplaces for tokens and others for aiming to fundraise using crypto assets. The proposed bill states that the Digital Token Act in Colorado will allow businesses in the state “that use crypto-economic systems to obtain growth capital to help grow and expand their businesses, thereby promoting the formation and growth of local companies and the accompanying job creation and helping make Colorado a hub for companies that are building new forms of decentralized “Web 3.0″ platforms and applications.”
According to the bill, the consumption purpose of the digital token is classed as something “to provide or receive goods, services, or content, including access to goods, services, or content.”
In order to make sure you could qualify for an exemption, the consumptive reasoning for the token must be available within 180 data of its sale or transfer and the original buyer won’t be able to resell or transfer the token until the consumptive purpose is available.
Specifically, the proposed bill states, “the initial buyer provides a knowing and clear acknowledgement that the initial buyer is purchasing the digital token with the primary intent to use the digital token for a consumptive purpose and not for a speculative or investment purpose.”
In addition to this, the bill also states that in order to make an exemption, the issuer must first file a notice of intent with the state’s securities commissioner. In other news, there was a similar development last month where two members of the United States House of Representatives filed the “Token Taxonomy Act” a proposal also seeking to exclude digital tokens from being defined as securities.