Arizona Law Would Define When ICOs Are Securities

The number of blockchain bills before the Arizona state legislature is growing, public records show.

Arizona state representative Jeff Weninger introduced two measures focused on the tech last week, including one that would begin laying down ar regulatory framework for initial coin offerings (ICOs) conducted in the state.

Two new bills introduced by the representative include "virtual coin," "blockchain" and "virtual coin offering" as new terms to be included in the Arizona government’s list of definitions, particularly as they relate to securities and crowdfunding.

Notably, the first bill defines "virtual coin" as "a digital representation of value that can be digitally traded and that functions as a medium of exchange, unit of account and store of value."

The bill goes on to define a "virtual coin offering" as any token sale where the token is treated as a security as defined by existing Arizona law. However, tokens which are not marketed as investments and which the purchaser can utilize or redeem within 90 days, according to the bill, would sit outside that definition.

The second bill

amends the Arizona Revised Statutes to account for data that is written and stored on a blockchain. In a way, the bill bears a relation to a past Weninger bill which legally recognized blockchain signatures and smart contracts, a measure that was signed into law last year.

Stepping back, the state government has made several steps in recent weeks to broaden the adoption of the tech within the state. Earlier this month, the State Senate completed work on a bill which would allow the government to collect taxes in bitcoin.

Arizona legislature image via Nagel Photography / Shutterstock