California Bill Proposes to Exempt a Few Cryptos from Securities Law

A lawmaker in California has introduced a bill, proposing an exemption of a narrow set of digital currencies from the state’s corporate security categorization.

Introduced in the California Assembly on Tuesday, the bill was moved as an amendment to legislation first submitted by Majority Leader Ian Calderon (D-57) in February.

The bill proposed the exemption of digital assets, which are “presumptively not an investment contract” from the definition of security.

“Existing law, the Corporate Securities Law of 1968, provides for the Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term 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,” the bill explained.

“Existing law defines a "security" to mean a note, stock, and, among other things, an investment contract. This bill would create an exception from the above definition by providing that a digital asset meeting specified criteria is presumptively not an investment contract within the meaning of a "security." The bill would allow that presumption to be rebutted upon good cause shown by clear and convincing evidence by the Commissioner of Business Oversight, as specified.”

A key bill in defining crypto

It specified that the set criteria fall for any digital asset obtained in exchange for Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term in fiat or digital currencies.

The categorization also extends to digital assets which are “used on a fully operational network and the purpose of the asset is for a consumptive purpose, such as the access or consumption of goods, services, data, or the performance of useful functions other than as a medium of exchange or store of value.”

Many regulators and lawmakers in the US, and also globally, are debating properly categorizing digital currencies - whether they fall under securities or not.

While Bitcoin and Ethereum are seen as commodities by the US regulators, XRP, another major digital currency, is facing multiple lawsuits for the allegation of violating securities laws.