Colorado May Exclude Cryptocurrencies from Securities Law
The Colorado state legislature is considering a bill that will provide exemptions for cryptocurrency-related companies from the Securities Law.
In Colorado, a group of senators brought in a bill to the Senate to exclude cryptocurrencies and specific digital tokens from the scope of the existing Securities Laws. According to documents published on January 4, the bill is currently under consideration, and once it is approved, the cryptocurrency industry and investors in digital assets will gain more freedom and flexibility.
The bill, known as “Colorado Digital Token Act” represents a bipartisan effort led by Republican Jack Tate and Democrat Steve Fenberg. They seek to release brokers, dealers and other parties engaged in trading digital tokens from the requirement to obtain a license and register tokens as securities.
In January 2018, both Jack Tate and Steve Fenberg co-authored a bill that proposed to use blockchain technology for personal data protection.
The proposed bill defines digital tokens as "a digital unit with specified characteristics, secured through a decentralized ledger or database, exchangeable for goods or services, and capable of being traded or transferred between persons without an intermediary or custodian of value."
It is worth noting that the state senate in Colorado declined a previous proposal on cryptocurrency and digital assets regulation in May. However, the authors of the new bill hope to soften the regulatory approach towards blockchain technology and a new class of assets at the state level.
“Blockchain technology has the potential to create new forms of decentralized ‘Web 3.0’ platforms and applications that have advantages over the current centralized internet platforms and applications,” according to the document.
The senators point out that Colorado has become a hub for innovative companies that seek to use cryptocurrency and blockchain-based technologies, which makes a case for clear regulation and guidelines in the industry.
While the United States has a patchy regulatory landscape when it comes to cryptocurrencies, Colorado has an excellent chance to pioneer the adoption of a softer regulatory approach to the new phenomenon.
The recently elected governor of Colorado, Jared Polis, used to be a member of Congressional Blockchain Caucus in the House of Representatives and actively advocated for the US to adopt a leading role in cryptocurrency regulation.