In a bid to provide regulatory clarity to issuers and buyers of distributed ledger technology (DLT) based virtual currencies in the area, Wyoming, Colorado, and Montana states have taken the bold step to draft bills pertaining to the use of bitcoin and altcoins, reports Natlawreview on August 1, 2019
The Pro-Crypto Trio
Per sources close to the matter, Wyoming, Colorado, and Montana have all drafted cryptocurrency legislation to regulate the purchase, sale, and transfer of virtual currencies in their individual States.
It’s worth noting that Wyoming started paying attention to its crypto industry in 2018. At the time, the state government drafted four pro-blockchain regulations including HB 19, HB 70, SB 111 and, SF 34.
Furthermore, Wyoming state governor, Mark Gordon, signed bills HB 19, and SB 111 into law on March 7, 2018, and March 12, 2018, respectively, while bill HB 70 and SF 34 both became effective on July 1, 2019.
Breaking it down, Wyoming’s bill HB 19 and HB 70, amended the Wyoming Money Transmitter Act which exempts tokens from money transmitter laws as well as regulations for digital currency transmission.
Montana’s Bill on the use of Cryptocurrencies
Similarly, Montana passed House Bill No. 584 titled “Generally Revise Laws Relating to Cryptocurrency,” and the bill became effective on July 1, 2019.
House Bill No. 584 exempts blockchain-based utility tokens from the state’s securities law and as such, rules that are applicable to securities in Montana no longer relate to utility tokens as long as a certain condition is met.
Reportedly, the condition requires that cryptocurrencies must have a “primarily consumptive” purpose and this purpose is defined under the ACT as the token’s aim to “provide or receive goods, services, or content, including access to goods, services, or content.”
On the same note, an issuer of security tokens must file certain disclosures in the state and notify the securities commissioner before they can sell cryptocurrencies in Montana.
Colorado’s Cryptocurrency Bill
The “Colorado Digital Token Act” or Colorado Act will come into effect before the end of August 2019.
Reportedly, the Colorado Act will allow businesses in the state to sell, purchase, trade, and transfer digital tokens between certain persons with the aim of production, distribution, and consumption of goods.
Crypto transactions that meet certain criteria will be exempted from the mandatory securities registration requirements under the Colorado Securities Act (CSA).
Despite this exemption, an issuer or individual who purchases, sells, or transfers digital tokens is still required to file a notice of intent as well as a consumptive purpose at the time of sale or within 180 days after the sale of such asset.
In related news, BTCManager informed on August 1, 2019, that U.S. lawmakers have made it clear that it’s virtually impossible to entirely ban bitcoin. As such, regulating the industry is the only way to go.