Five senators in the U.S State of Rhode Island are currently leading a charge to liberate some crypto tokens from local securities law.
On Wednesday, the senators filled House Bill 5596 proposing that not all tokens issued by crypto projects should come under the Rhode Island Uniform Securities Act.
As per the bill, the senators are seeking an exemption for crypto tokens they termed “open blockchain tokens.” These tokens will have the following features:
are “only exchangeable for the receipt of, goods, services or content, including rights of access to goods, services or content.” In a more straightforward sense, the tokens will serve a consumptive purpose or offer holders some utility on the platform that issues it.
Are not sold as a financial investment to the initial buyers. In a case where the tokens do not have a utility to offer during the time of the initial sale, investors would have to wait until the launch of a purpose of utility.
If the crypto project issuing the token satisfies the above requirements for exemption, the bill proposes that the token issuers should not be treated as securities dealers or brokers.
However, the project must file for a notice with the Rhode Island State Secretary to stand the chance of exemption and also abide by some securities law that fit into the scope of their activity.
The bill will go into effect as soon as the House passes it and will mirror efforts recently made by lawmakers in neighbouring Colorado to exempt ICO tokens from local securities law.
Stmarket.co have also reported similar efforts at the Federal level with Reps Warren Davidson and Darren Soto introducing the Token Taxonomy Act in December. There are high hopes that these legislative efforts will pave the way for crypto projects to raise funds without breaching existing regulations.
Subscribe to our Telegram channel to stay up to date on the latest STO and crypto regulations news