New blockchain and cryptocurrency securities laws in New Jersey
Cryptocurrency has long been unregulated, which has made some investors nervous. However, New Jersey has been making changes to begin regulating blockchain technologies. This could be a major alteration that shifts how the market works in the future.
One such example is the Digital Asset And Blockchain Technology Act. Proponents of this act claim that it will:
- Protect consumers
- Create a licensing structure
- Provide more transparency
- Require licensing for both consumers and operators
Essentially, since a license would then be required, the state could regulate who could be involved in cryptocurrency trading. They would be able to deny this ability to those who had been convicted of theft, forgery, embezzlement or fraud, for example. The act proposes doing so if those convictions came within the last five years.
Why is this being done?
Those behind the act said they had talked with consumers who had been victimized through cryptocurrency fraud. They tried to figure out how they could prevent such a thing from happening in the future. Investing is always risky, and cryptocurrency is especially volatile, but that still doesn’t mean that people should be exposed to fraud. Potential changes to the law may be able to help alleviate this problem.
That said, it can also make working in the space vastly more complicated than it has been in the past. All who are involved need to understand exactly what obligations they have.
The information contained in this publication should not be construed as legal advice. Should further analysis or explanation of the subject matter be required, please contact the lawyer with whom you normally consult. No attorney-client relationship is created by this post.
For more information or advice concerning your corporate and regulatory compliance efforts, please contact Daniel TeJumson, or any member of the firm’s corporate and securities regulatory practice.