Colorado's new Digital Tokens Act exempts cryptos from securities laws

08 Mar, 2019 | Updated: 08 Mar, 2019
by David Robb
Regulation
Colorado's new Digital Tokens Act exempts cryptos from securities laws

The state of Colorado has recently passed some new legislation on cryptocurrencies. The Digital Tokens Act will exempt certain digital tokens from securities laws, which should be a positive development for the crypto space.

Colorado has been one of the parts of the U.S. that is leading the way in terms of pro-crypto regulation. Towards the end of last year, it passed new legislation that meant that companies setting up crypto trading platforms didn't need money changing licenses.

Read more: Crypto exchanges in Colorado US, don’t need money license to trade non-fiat cryptoColorado expects from revamped bill after the previous failed last year

Senate Bill 19-023 will further enable the establishment and growth of crypto companies in the state. It claims that the "COSTS AND COMPLEXITIES OF STATE SECURITIES REGISTRATION CAN OUTWEIGH THE BENEFITS TO COLORADO BUSINESSES USING CRYPTOECONOMIC SYSTEMS THAT SEEK TO RAISE GROWTH CAPITAL AND CREATE NEW DECENTRALIZED INTERNET PLATFORMS AND APPLICATIONS".

It also acknowledges that "THE PRIMARY PURPOSE OF THE DIGITAL TOKEN IS A CONSUMPTIVE PURPOSE", and not as speculation or investment, so it is legitimate for crypto businesses to ignore securities restrictions.

Read more: Why hasn't the SEC approved a Bitcoin ETF yet?

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