Vermont agencies studying need for blockchain regulations

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Vermont is looking into what actions to take as a response to the growing blockchain industry in the state.

The state’s Attorney-General T.J. Donovan said in a press release that his office, along with the Department of Financial Regulation (DFR), the Secretary of State, and the Agency of Commerce and Community Development (ACCD), have formed a working group specifically to determine what opportunities and challenges are posed by the technology.

The agencies hope to increase their understanding of blockchain in order to better decide if any legislation or regulatory action is required for protecting users of the technology or those affected by its use.  

As part of the initiative, talks will be held with experts and investors in the field, according to the release.

Donovan said, “In an era of persistent data hacks, security breaches, and online activity, exploring new and innovative ways to protect our data is essential… And, we must strive to balance economic opportunity with consumer protection.”

Already, the Vermont government has taken actions on blockchain companies, as part of the continentwide ‘Operation Cryptosweep’ targeting those firms found noncompliant with regulations.

In June, the DFR stopped operations of California-based LevelNet, claiming the company, with its initial coin offering (ICO), had advertised investment returns that were “unfounded and unrealistic.”

Act No. 205 was signed into law in May 2018, and seeks to promote blockchain business development in the state, allowing for companies to register as blockchain-based limited liability companies, subject to certain requirements.

The act includes a provision for the DFR to study blockchain’s potential for insurance and banking, and other industries that it could be adopted for.

The ACCD is also tasked to hold events and business support programs to promote blockchain technology and financial technology-related economic development, including the organizing of a fintech summit.

House Bill 765, which dealt with general regulation and sought to promote education and adoption of blockchain technology, failed to pass in the last regular session.