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

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Jayashree Ingle Follow

INDIA

Aug, 26 2020

Aug, 26 2020

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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

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