Colorado Governor signs bill to exempt certain cryptocurrencies from state securities laws

Colorado Governor Jared Polis signed the Digital Tokens Act into law last week, excluding some cryptocurrencies from state securities laws.

Senate Bill 19-023 or the "Colorado Digital Token Act" is expected to come into effect on August 02, 2019. It states 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 by offering the sale or transfer of digital tokens that have a primarily consumptive purpose.”

Among other conditions, the bill states that the offer or sale of a digital token is exempt from state securities laws if its primary purpose is a “consumptive purpose” and the issuer “does not market the digital token to be used for a speculative or investment purpose.”

“Consumptive purpose means to provide or receive goods, services, or content, including access to goods, services, or content,” it explains.

The bill was submitted to the Senate of Colorado in early January and was signed into law on March 06.