DIVISION 1.25. Digital Financial Assets Businesses [3101. - 3907.]

Division 1.25 added by Stats. 2023, Ch. 792, Sec. 1.

§§ 3101–3907 · 44 sections

1. CHAPTER 1. General Provisions §§ 3101–3103 · 3 sections

   • § 3101 This division shall be known as the Digital Financial Assets Law.
   • § 3102 For purposes of this division: (a) “Applicant” means a person that applies for a license under this division. (b) “Bank” means a bank, savings bank, savings…
   • § 3103 (a) Except as otherwise provided in subdivision (b), this division governs the digital financial asset business activity of a person doing business in this…
2. CHAPTER 2. Licensure §§ 3201–3225 · 13 sections

   • § 3201 On or after July 1, 2026, a person shall not engage in digital financial asset business activity, or hold itself out as being able to engage in digital…
   • § 3203 (a) An application for a license under this division shall meet all of the following requirements: (1) The application shall be in a form and medium prescribed…
   • § 3205 (a) The commissioner may issue a conditional license to an applicant who holds or maintains a license to conduct virtual currency business activity in the…
   • § 3207 (a) (1) (A) A licensee shall maintain a surety bond or trust account in United States dollars in a form and amount as determined by the department for the…
   • § 3209 (a) The department shall issue a license to an applicant if all of the following conditions are satisfied: (1) The commissioner finds that all of the criteria…
   • § 3211 (a) Subject to subdivision (h), between October 1 and November 1 of each year, a licensee shall submit to the department an annual report under subdivision…
   • § 3213 A license under this division is not transferable or assignable.
   • § 3215 (a) The department may adopt rules necessary to implement this division and may offer informal guidance to any prospective applicant for a license under this…
   • § 3217 (a) The commissioner may establish relationships or contracts with the Nationwide Multistate Licensing System and Registry or other entities designated by the…
   • § 3219 (a) (1) The commissioner shall require the submission of fingerprints for each applicant if the applicant is a natural person, and of each executive officer…
   • § 3221 (a) An applicant shall not be denied a license on the basis of a criminal conviction, or on the basis of acts underlying a criminal conviction, if the…
   • § 3223 (a) Except as otherwise provided in Section 5111 of the SAFE Act, the requirements under any federal law or the Information Practices Act of 1977 (Chapter 1…
   • § 3225 The commissioner shall regularly report violations of this division, enforcement actions under this division, and other relevant information to the Nationwide…
3. CHAPTER 3. Examination §§ 3301–3311 · 6 sections

   • § 3301 (a) (1) (A) The department may, at any time and from time to time, examine the business and any office, within or outside this state, of any licensee, or any…
   • § 3303 (a) A licensee shall maintain, for all digital financial asset business activity with, or on behalf of, a resident for five years after the date of the…
   • § 3305 The department may cooperate, coordinate, jointly examine, consult, and share records and other information with a self-regulatory organization, a federal or…
   • § 3307 (a) A licensee shall file with the department a report of the following, as may be applicable: (1) A material change in information in the application for a…
   • § 3309 (a) For purposes of this section, “proposed person to be in control” means the person that would control a licensee after a proposed transaction that would…
   • § 3311 (a) Before a proposed merger or consolidation of a licensee with another person, the licensee shall submit all of the following, as applicable, to the…
4. CHAPTER 4. Enforcement §§ 3401–3415 · 8 sections

   • § 3401 For the purpose of this chapter, “enforcement measure” means an action that includes, but is not limited to, all of the following: (a) Suspend or revoke a…
   • § 3403 (a) The department may take an enforcement measure against a licensee or person that is not a licensee but has engaged, is engaging, or is about to engage in…
   • § 3405 (a) Except as provided in subdivision (b), the department may take an enforcement measure only after notice and opportunity for a hearing as appropriate in the…
   • § 3407 (a) If a person other than a licensee has engaged, is engaging, or is about to engage in digital financial asset business activity with, or on behalf of, a…
   • § 3409 (a) Revocation of a license under this division is effective against a licensee one day after the department sends notice in a record of the revocation to the…
   • § 3411 The department may enter into a consent order with a person regarding an enforcement measure. The order may provide that it does not constitute an admission of…
   • § 3413 Whenever the commissioner deems it necessary for the general welfare of the public, the commissioner has continuous authority to exercise the powers set forth…
   • § 3415 (a) This chapter shall not be construed to provide a private right of action to a resident. (b) The duties and obligations imposed by this chapter are…
5. CHAPTER 5. Disclosures and Protections §§ 3501–3509 · 5 sections

   • § 3501 (a) When engaging in digital financial business activity with a resident, a covered person shall provide to a resident the disclosures required by subdivision…
   • § 3503 (a) (1) A covered person that has control of a digital financial asset for one or more persons shall at all times maintain in its control an amount of each…
   • § 3505 (a) (1) Except as provided for under paragraph (2), a covered exchange, prior to listing or offering a digital financial asset that the covered exchange can…
   • § 3507 A covered person shall prominently display on its internet website a toll-free telephone number through which a resident can contact the licensee for customer…
   • § 3509 The requirements imposed on a covered person or a covered exchange under this chapter shall be operative on July 1, 2026.
6. CHAPTER 7. Policies and Procedures §§ 3701–3702 · 2 sections

   • § 3701 (a) An applicant, before submitting an application, shall create and, during licensure, maintain in a record policies and procedures for all of the following:…
   • § 3702 (a) An applicant, before submitting its application, shall establish and maintain in a record a policy or procedure designed to ensure compliance with this…
7. CHAPTER 8. Miscellaneous Provisions § 3801 · 1 section

   • § 3801 The provisions of this division are severable. If any provision of this division or its application is held invalid, that invalidity shall not affect other…
8. CHAPTER 9. Digital Financial Asset Transaction Kiosks §§ 3901–3907 · 6 sections

   • § 3901 For purposes of this division: (a) “Charges” means either of the following: (1) Fees or expenses paid by the customer. (2) The difference between the current…
   • § 3902 An operator shall not accept or dispense more than one thousand dollars ($1,000) in a day from or to a customer via a digital financial asset transaction kiosk.
   • § 3904 On or after January 1, 2025, an operator shall not collect charges, whether direct or indirect, from a customer related to a single digital financial asset…
   • § 3905 (a) (1) On or after January 1, 2025, before a digital financial asset transaction, an operator shall provide a written disclosure in English and in the same…
   • § 3906 (a) An operator shall provide to the department a list of all locations of digital financial asset transaction kiosks that the operator owns, operates, or…
   • § 3907 (a) On or after July 1, 2026, an operator shall comply with Section 3201 to the extent that the operator engages in digital financial asset business activity.…