Signed on March 6 by the governor of Colorado, Jared Polis, State attorney general Phil Weiser, and president of the Colorado Senate Leroy Garcia, the bill exempts
The digital tokens mentioned by the bill “would not typically be treated as an investment if it is not tied or linked to the future profits and earnings of the company”.
The text of the bill also lists the requirement for companies wanting to issue a digital token under the new rules. To qualify its digital token, a company is required to file a notice of intent with the state’s securities commissioner and the good, service, or content would have to be available at the time of sale and be so within 180 days from the date of sale.
The buyers of such digital tokens have to acknowledge that they are not an investment and are prohibited from selling or transferring the ownership of their tokens.
Explaining the reasons behind the new law, the authors of the bill pointed to blockchain technology’s potential to create new forms of decentralized “web 3.0” platforms and applications that have advantages over the current centralized internet platforms and applications.
They also criticized previous regulations for putting companies seeking to issue or effect the purchase, sale, or transfer of utility tokens in a regulatory uncertainty in the state which, according to the bill has “become a hub for companies and entrepreneurs that seek to utilize crypto economic systems to power blockchain technology-based business models.”