Analysis

Colorado Could Carve Smoother Path For Digital Tokens

Law360 (February 1, 2019, 6:10 PM EST) -- The Colorado Senate's recent passage of a law that exempts digital tokens that are sold to consumers rather than investors from being deemed securities could bode well for certain blockchain technology startups seeking clearer regulatory paths elsewhere.

The Colorado Digital Token Act is billed as an effort to reduce legal uncertainty for cryptotcurrency companies who fear getting snared by complex securities regulations by providing a safe harbor from state securities laws under limited and specified conditions.

Namely, businesses seeking an exemption must target the sale of their digital tokens to likely consumers of its product and not market the tokens for speculative...

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