California Moves Forward With Digital Asset Bill

Published at: Aug. 15, 2020

California’s Senate Banking and Financial Institutions committee has passed a bill seeking to define digital assets and measure its impact on the state and consumer protections. 

Assembly Bill 2150, which can potentially influence how federal regulators approach digital assets, unanimously passed the Senate’s Banking and Financial Institutions committee. It will be discussed in the Committee on Appropriations as early as August 17.  The bill had previously passed the California Assembly before moving to the Senate. 

The bill, first proposed by California Assembly Majority Leader Ian Calderon, initially sought to presume digital assets are not securities. However, amendments to the bill by the Senate refrained from further defining digital assets and tokens. It now focuses on directing the Department of Business Oversight to conduct a study to see if California can enact policies similar to the Security and Exchange Commission’s (SEC) Proposed Securities Act Rule 195- Time Limited Exemption for Tokens. 

The study wants to see how treating digital assets as securities for a limited amount of time can impact consumer protections, benefits to the state, and hat the minimum standards to meet the exemptions.

The Department of Business Oversight must also provide suggestions for regulatory frameworks and define key terms. The report should be presented to the California Legislature on or before January 1, 2022. 

SEC Commissioner Hester Peirce proposed the token exemption back in February though the regulatory body has not officially enacted it.

Tags
Regulation
Sec
Law
California
Related Posts
Tezos Likely Avoiding SEC Action With $25M Class-Action Lawsuit Settlement
The Tezos (XTZ) class-action lawsuit from law firm Block & Leviton will likely conclude in a $25-million settlement on August 27. Tezos, like many initial coin offerings (ICO) from 2017, has come under scrutiny from both investors and regulators alike alleging that its token sale constituted an illegal offering of securities. Indeed, the U.S. Securities and Exchange Commission (SEC) has come down hard on numerous 2017-era ICOs demanding penalties for securities violation. Even distributions to non-U.S. citizens have also come under the SEC’s radar, as was the case with Telegram. The SEC has consistently maintained that most ICOs are indeed …
Blockchain / June 28, 2020
New Bill Would Presume That Digital Assets Are Not Securities in California
Per new updates to a bill to amend California’s securities law introduced in the state’s legislative body on May 5, the largest economy in the United States and the world’s tech hub may be providing new clarity to crypto owners. Formalizing the Howey Test for crypto? Updates to the definition of what constitutes a security include: “Investment contract, except any digital asset that meets one of the following criteria is presumptively not an investment contract.” The criteria named are more or less a line-reading of the Howey Test — the federal metric for assessing whether an asset qualifies as an …
Regulation / May 6, 2020
SEC’s Cryptomom Peirce Believes US Capital Markets Can ‘Transform People’s Lives’
In a July 7 fireside chat courtesy of Unitize, Commissioner Hester Peirce of the Securities and Exchange Commission continued to advocate for regulatory clarity for crypto as a means of opening up capital markets to innovation. Innovation and regulation “I believe in the power of our capital markets to transform people’s lives,” said Peirce. “I wanted to make sure that our regulatory structure was flexible enough to accommodate innovation.” She noted that the the size of the U.S. economy makes its regulations critical to global fundraising: “The race to the bottom is something we should be concerned about. But that’s …
Regulation / July 7, 2020
Bored Ape creators and other NFT projects investigated by SEC probe
Sources say that the U.S. Securities and Exchange Commission (SEC) probe into Yuga Labs is actually part of a wider investigation into the nonfungible token (NFT) market, which already came to light in March. On Oct. 11, a report from Bloomberg citing a source “familiar with the matter” said the SEC is investigating Yuga Labs over whether certain NFTs are “more akin to stocks” and whether the sales of certain digital assets violate federal laws. However, Cointelegraph understands that the investigation is part of the ongoing SEC probe into the wider NFT market, which is looking at whether certain NFTs …
Nft / Oct. 12, 2022
Crypto and securities: New interpretation of US Howey test gaining ground
The crypto community celebrated a victory in court on Jan. 30 when the United States Securities and Exchange Commission (SEC) admitted in the remedies hearing of the LBRY case that secondary sales of its LBC coin were not securities sales. John Deaton, who represents Ripple in court in the SEC’s case against it, was so excited that he created a video for his Twitter-hosted CryptoLawTV channel that evening. Deaton, a friend of the court, or amicus curiae, in the case, recounted a conversation he had with the judge that day. “Look, let’s not pretend. Secondary market sales are a problem,” …
Adoption / Feb. 9, 2023