Two lawmakers from the U.S. state of Colorado have introduced legislation seeking to exempt cryptocurrencies and certain digital tokens from securities laws.
On Friday, senators Stephen Fenberg (Democrat) and Jack Tate (Republican) jointly filed a bill dubbed the “Colorado Digital Token Act,” proposing that digital tokens with a "primarily consumptive” purpose should be exempted from securities laws provided they are not marketed for “speculative or investment” purposes.
The move is aimed to remove "regulatory uncertainty" that could hold back firms offering marketplaces for tokens and others aiming to fundraise using crypto assets.
Creating 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," the proposed bill states.
The consumptive purpose of digital tokens is defined as "to provide or receive goods, services, or content, including access to goods, services, or content," according to the document.
To qualify for exemption, the consumptive purpose for a token must be 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.
Further, the bill specifies: “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.”
For an exemption, an issuer must file a notice of intent with the state's securities commissioner, the bill adds.
In a similar development last month, two members of the U.S. House of Representatives filed the “Token Taxonomy Act,” a proposal also seeking to exclude digital tokens from being defined as securities.
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