A bill aiming to provide clarity on state securities laws for cryptocurrency companies has passed in the Colorado Senate and House of Representatives unanimously and is headed for Gov. Jared Polis’ desk for his signature.
“We assume he will sign the bill,” Senate Majority Leader Steve Fenberg told Denver Business Journal.
As a congressman, Polis advocated for the federal government's exploration of blockchain.
He and Republican U.S. Rep.David Schweikert, of Arizona, launched the bipartisan Congressional Blockchain Caucus in 2017.
The Cryptocurrency Exemption Colorado Digital Token Act exempts issuers of digital tokens from having to abide by the Colorado Securities Act under certain circumstances.
In order to qualify for the exemption, the digital tokens must be used to purchase goods, services or content.
“An example of this type of digital token could be ‘Spotify Coin,’ where Spotify pre-sells subscriptions to new content through the sale of a digital token, and then uses the proceeds from that sale to actually develop the content,” said an informational sheet on the bill provided by Fenberg’s staff to DBJ. “This is similar to crowdfunding platforms like Indiegogo or Kickstarter.”
The bill does not allow for tokens to be marketed for speculative or investment purposes. In addition, the bill mandates that the goods, services or content purchased by the token must be available within six months of the time of the sale in order for the issuer to qualify for the exemption.
Issuers who aim to use the exemption must file their intent to do so with the Colorado Division of Securities.
Fenberg said he hopes the bill eases the uncertainty of blockchain entrepreneurs and users regarding regulations.
“It creates consistency,” Fenberg said. “It makes it so future entrepreneurs and potential users of blockchain technology sort of know that Colorado is a place that has very clear rules.”
The bill was developed by the Colorado Council for the Advancement of Blockchain Technology, which was created by former Gov. John Hickenlooper last June to recommend guidelines and policies to help spur blockchain innovation in the state.
Blockchain is a technology that enables computer networks to trade information without relying on a centralized authority. It is best known for supporting cryptocurrencies such as Bitcoin.
Colorado leaders have previously told DBJ that they are aiming to make the state a blockchain hub. Fenberg said he hopes the bill spurs innovation in the sector locally.
“Colorado is often on the forefront on a lot of new ways of doing things,” Fenberg said.
Amount of capital under management as of Jan. 1, 2018
| Rank | Prior Rank | Business name |
|---|---|---|
1 | 1 | Resource Capital Funds |
2 | 3 | Griffis Residential |
3 | 2 | Foundry Group |
