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Colorado senators want some cryptocurrencies to be exempt from securities laws

But it means more paperwork

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Lawmakers from Colorado are looking to introduce legislation that would exempt cryptocurrencies from current securities laws.

Last week, Stephen Fenberg (Democrat) and Jack Tate (Republican) together filed the “Colorado Digital Token Act” – spotted by CoinDesk.

The bill states, if a token is designed for consumption, and not marked for investment or speculation, it should not be subject to securities legislation. As such, any companies looking to issues cryptocurrencies or tokens would need to clearly state the coin’s purpose and satisfy the relevant regulations.

In order to qualify for the exemption, the cryptocurrency or token will need to be usable within 180 days of its initial sale. Any companies planning an ICO with no product planned for the near future would almost certainly be regarded as a security and not be granted an exemption.

Indeed, it seems that bills and regulations such as the Colorado Digital Token Act only serve to further make ICOs more difficult and bureaucratic for blockchain startups.

At our cryptocurrency and blockchain event last December, Thomas Power – one of Alan Sugar’s first apprentices – declared that “unregulated ICOs” are dead. He might be right. If more bills like Colorado’s are passed, we are surely on a path towards more regulated security token offerings (STO).

Published January 7, 2019 — 13:13 UTC