Colorado Senators Introduce Legislation to Exempt Digital Tokens from Securities Laws
Senators Stephen Fenberg (D.) and Jack Tate (R.) have filed a bipartisan bill called the “Colorado Digital Tokens Act.” If passed, the legislation would exempt cryptocurrencies and some digital tokens from existing securities law.
It’s no secret that the regulatory environment in the United States is quickly changing.
In late October, Wyoming legislators voted to approve a bill that allowed for an integration between blockchain and traditional banking. Then, just last month, representatives Warren Davidson (R.-Ohio) and Darren Soto (D.-Florida) proposed a bill called the “Token Taxonomy Act” in the House which sought to exclude cryptocurrencies from existing securities law.
Now, senators from Colorado are trying to replicate the Token Taxonomy Act in the Coloradoan General Assembly with their own “Colorado Digital Tokens Act.”
A Pro-Innovation Position
The proposed bill will make digital tokens with a “primarily consumptive purpose” exempt from securities law. This would also allow fundraising with crypto assets much easier.
“[The bill] will enable colorado businesses that use crypto-economic systems to obtain growth capital to help grow and expand their businesses… helping make colorado a hub for companies that are building new forms of decentralized ‘Web 3.0,’” the legislation reads.
In order for qualify for the exemption, the token must be available within 180 days of its initial sale. The stipulation also includes that the token must have a clearly outlined consumptive purpose during its sale so that the buyer knows they are not purchasing it as a speculative investment. The issuer must also file a notice of intent with Colorado’s securities commissioner.
What do you think of the proposed bill? Does Colorado have the right idea? Let us know your thoughts.