California Bill Proposes Exemption of few Crypto -assets from the Securities laws


An amendment Bill has been presented this
week in California Assembly by a lawmaker to exempt few cryptos (which are
presumptively not an investment contract) from the state’s definition of
corporate securities.
The Bill was initially introduced in
February by majority leader Ian Calderon (D-57). The bill recommends freeing
few digital assets from the definition of security which will ease them from
regulatory complexities.
According to the Bill:
“Existing law, the corporate Securities Law
of 1968, provides for the regulation of the issuance of corporate securities,
requires the qualification of an offer or sale of securities and provides for
exemptions from qualification with the Commissioner of Business Oversight.”
Existing law defines ‘security’ to mean as
a stock, note and an investment contract as well. The suggested amendment would
change this definition by indicating that the digital asset with specified
criteria is presumptively not an investment contract as per the predefined
definition of the security.
Conflict of opinion about Classification
of Crypto Assets
Lately, the categorization of crypto assets
has been a controversial topic of debate among lawmakers, regulators, and
various agencies across the US and the world as well. There is a variance in
opinion on whether the crypto assets fall under securities or not. The debate
has led to court tussles over the applicability of the Howey test to the crypto
assets.
Ethereum and Bitcoin are considered as commodities by the US regulators. Whereas XRP currency is tangled under multiple lawsuits for alleged violation of securities laws.
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Jayashree Ingle
CBW - External Analyst
INDIA