Two senators from the state of Colorado are introducing legislation that will exempt cryptocurrencies and some digital tokens from securities laws.
Stephen Fenberg (Democrat) and Jack Tate (Republican) together filed a bill at the end of last week, and it has been named the “Colorado Digital Token Act.” It proposes that digital tokens with a “primarily consumptive” purpose should be exempted from securities laws provided they are not marketed for “speculative or investment” purposes.
It is hoped that this will relieve regulatory uncertainty that “ could hold back firms offering marketplaces for tokens and others aiming to fundraise using crypto assets,” Coindesk reports.
The senators also hope that the Colorado Digital Token Act “will enable Colorado businesses that use cryptoeconomic 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 consumptive purpose of digital tokens is “to provide or receive goods, services, or content, including access to goods, services, or content.”
A token will qualify for exemption if it is “available within 180 days of its sale or transfer and the initial buyer cannot resell or transfer the token until the consumptive purpose is available.”
Additionally, the bill also states the following: “The initial buyer provides a knowing and clear acknowledgment 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.”
What this means is that an issuer must file a notice of intent with the state’s securities commissioner. This is the second piece of legislation to be put before the Senate in recent months: two members of the House of Representatives filed the “Token Taxonomy Act,” a proposal that also seeks to exclude digital tokens from being defined as securities.