The Digital Token Act was just signed into law by Jared Polis, the Governor of Colorado, and exempts certain types of cryptocurrencies from any state regulation. Colorado now becomes the first state to allow some companies to not have to concern themselves with strict securities registration requirements. So, as you might expect, there are a few “hitches” to actually get around those “pesky” regulations, BUT the Digital Token Act really opens up the ability to build new businesses in Colorado. Under the new legislation some digital tokens will be able to exchange value on a secure blockchain and not be labeled as securities. So what digital tokens are free of regulations? Specifically, cryptocurrencies defined as having a primary consumptive purpose.
“Consumptive purposes’ means to provide or receive goods, services, or content, including access to goods, services, or content.”
While regulators in Washington (hello SEC) are still “researching” what cryptocurrencies are, individual states like Colorado and Wyoming are leading the way forward. More details below.
(Bill Taylor/Fintek Capital)
“Colorado Governor Jared Polis just signed the Digital Token Act. The new law exempts certain cryptocurrencies from securities laws and allows technologists in Colorado to operate outside of strict securities registration requirements.
Lawmakers in Colorado introduced SB19-023 earlier this year to remove regulatory uncertainty surrounding cryptocurrencies. Passage of the Digital Token Act clears the way for entrepreneurs to emerge in Colorado and to build new technologies, strong ecosystems and decentralized applications that can use utility tokens to power various activities.
Under the new law, digital tokens that meet certain criteria will be able to transfer value on a cryptographically secure blockchain and will not be labeled as securities or otherwise subject to laws designed for fundamentally different financial instruments.
Digital tokens that are exempt highlight some of the major differences between a traditional, regulated security, such as a stock or a bond, and today’s emerging class of cryptocurrencies that can execute “smart contracts”, perform functions and transfer value.
The lawmakers recognized that they are not the same…”