The United States State of Montana has recognized utility tokens and exempted them from state securities by passing a new bill. The House bill 584, titled “Generally revise laws relating to cryptocurrency,” was signed by the Governor of Montana Steve Bullock on May 8, according to public documents.
Initiated by State Representative Shane Morigeau, the bill had its first reading in February 2019. The Bill has now passed with 33-15, and is set to come into force starting from July 1.
The new law defines a utility token as a digital unit that is created, recorded on blockchain, capable of being exchanged without a third party, and issued to enable owners to access a good or service delivered by the issuer “without vesting the holder with any ownership interest or equity interest in the issuer.”
According to the bill, a utility token transaction has to meet a number of requirements, with the purpose of a token set to be “primarily consumptive,” while using such tokens for speculative or investment purposes is prohibited. In this regard, the legislators explained that utility tokens should provide or receive goods, services, or content.
While a utility token has been exempted from state securities law, the issuers of such tokens still have to interact with the securities commissioner. For example, the issuer of the utility token should file a notice of intent to sell such tokens with the securities commissioner.
By passing its utility token law, the State of Montana has joined other crypto-friendly states, including Wyoming and Colorado. In January 2019, the State of Wyoming passed a bill recognizing cryptocurrencies as money. Subsequently, the administration of the State of Colorado passed cryptocurrency exemptions to its digital token act, enabling licensing requirements for entities operating with digital tokens.
Recently, Cointelegraph reported that major crypto exchange Bitfinex launched its exchange utility token UNUS SED LEO that is designed for a number of exchange-based operations. The token started trading on Bitfinex on May 20 against bitcoin (BTC), ether (ETH), EOS, major stablecoin tether (USDT), and the U.S. dollar.