Leading cryptocurrency firm Coinbase has announced the release of a Blockchain Token Securities Law Framework, prepared in collaboration with Coin Center, Union Square Ventures (USV) and Consensys.

A digital token created on a blockchain is called a blockchain token (or App Coin), which may function as a digital currency (such as bitcoin) or represent a right to tangible assets like gold or real estate.

“As the development of blockchain tokens (also known as App Coins) continues to enable new decentralized business models, new legal issues come into focus. For developers, legal and regulatory uncertainty can be one of the main barriers to building new blockchain protocols and applications”, Coinbase noted.

It said that the framework will act as a starting point for developers entering this space, who can use it to analyze the likelihood that a particular blockchain token would be subject to US federal securities law. The framework particularly focuses on US federal securities law as these laws pose the biggest risk for crowdsales of blockchain tokens, the document stated.

“[It] is intended to be both a rubric and guide to selling tokens in exchange for currency without running afoul of the US Securities laws designed to prevent unregistered capital raising,” ConsenSys said, as quoted by Futurism.

The document contains three sections – the first is designed to determine how likely a particular token is to be a security under US federal securities law; the second sets out some best practices for crowdsales; and the last section has a detailed securities law analysis by Debevoise & Plimpton LLP.

“The document is exemplary and demonstrates the best qualities of our industry, specifically the persistent search for answers and comfort in a legal system where final answers are almost exclusively handed down by the judiciary,” said ConsenSys General Counsel Matt Corva.