The New Jersey General Assembly may consider a bill that would decide when a digital asset or virtual currency is a security under state law.
All virtual currencies issued and sold to institutional investors would be considered securities in the U.S. state of New Jersey under the bill introduced by Democratic Assemblyman Herb Conaway, Jr. on Nov. 29. According to the short text of the bill, the legislation would supplement the New Jersey Uniform Securities Law, which currently makes no mention of virtual, digital or cryptocurrency.
The bill pertains only to institutional investors, which are defined as “a company or organization that invests money on behalf of other people.” It also specifies that stablecoins could be determined to be virtual currencies by the state’s Bureau of Securities.
Related: Coinbase pauses staking services in four US states following regulators’ orders
The bill would only apply to transactions governed by New Jersey law and would not impact the federal Securities and Exchange Commission.
Assemblyman Herb Conaway’s bill classifying virtual currencies. Source: Legiscan.com
Two other bills are pending in New Jersey that affect crypto. The “Virtual Currency and Blockchain Regulation Act” would provide regulation for consumer digital assets and decentralized autonomous organizations (DAOs). It recently passed both houses of the New Jersey legislature and is currently awaiting action by the governor.
#NewJersey introduces A5747, which would define all #virtualcurrency sold to #institutitonal investors as #securities. h/t to @kkirkbos for spotting this one! /1 https://t.co/f7vnwoentn
— Drew Hinkes (@propelforward) December 5, 2023
In addition, the “Digital Asset and Blockchain Technology Act” would require the state Department of Treasury to review and approve a digital payment platform for state-approved businesses “that do not have access to traditional financial services and are forced to operate in cash-only or cash-heavy environments.” The platform would use a virtual currency pegged to the USD and would facilitate audits, compliance and local tax payments.
Assemblyman Conaway’s office declined to comment on his bill when approached by Cointelegraph.
Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?
