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Utility tokens to be! A new crypto legislation in Montana

May 28, 2019

The state of Montana has just released a bill that will exclude cryptocurrencies from the securities law and will describe the use of utility tokens in a in a clear and straightforward manner.

The Governor of Montana, Steve Bullock signed House Bill 584 which proposes the new provisions, as a result, making the State of Montana a desirable location for crypto startups.

The bill with the title “Generally revise laws relating to cryptocurrency” was sponsored by Shane Morigeau and already passed its first and second reading in February. As a result of the approval earlier this month, the bill will take effect on July 1, 2019.

In accordance with the new regulations, any project that is planning issue of token must file a request with the States securities commission and shall not indicate any token as an investment or speculative instrument.

Another prescribed limitation is that the "consumptive purpose" of utility token is to remain available within 180 days after its time of sale or transfer. It defines the consumptive purpose as a meaning that token buyers can use it to gain access to goods and services or other content provided by the issuer. Along with the above requirement, the initial buyers of the token cannot resale it until the consumptive purpose for which they bought the token becomes available.

It should be pointed out that the federal rules surpass legislation at the state level laws, so the real-world impacts of the bill is at a risk of being restricted to crypto issuances within the state and to state residents. Nevertheless, that is another step on the way to transparent regulations for such tokens in the U.S.

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