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Senators in Colorado File a Bill to Exempt Cryptos from Securities Laws

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Laws seeking cryptocurrency and certain digital token’s exemption from the securities laws have been imported by two lawmakers from the state of Colorado USA. Stephen Fenberg, a prominent member of the Democrat party and Jack Tale, member of the Republican party came together and filed a bill titled ‘Colorado Digital Token Act’ which essentially recommends that digital tokens with the intention of primary consumption should not be under the securities laws provided the tokens are not advertised for ‘speculative or investment’. Instead, they should be exempted of them.

The purpose of the bill is to get rid of ‘regulatory uncertainty’ which have the potential to withhold organisations providing a marketplace for tokens from functioning, while others intend to raise funds using crypto assets. According to the bill, the Colorado Digital Token Act ‘will enable Colorado businesses 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.’ The bill further states that the definition for digital tokens is ‘to provide or receive goods, services, or content, including access to goods, services, or content.’

In order be eligible for the exemption, tokens consumptive purpose must be made accessible within 180 days of the tokens sale or transfer. Also, the initial purchaser of the token is not allowed to transfer or resell the digital token without the consumptive purpose. The bill passed states explicitly that ‘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.’ A notice is required to be filed stating the intent with the commissioner (State’s securities) to be eligible for an exemption.‘Token Taxonomy Act’ was filed by two members of the U.S. House of Representatives with the intention of excluding digital tokens to being classified as securities.

 

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