Cryptocurrency 2018 Legislation

Relates to money transmission and currency exchange businesses; relates to transmitting value that substitutes for money; relates to licensing requirements and registration through the Nationwide Multistate Licensing System and Registry; relates to surety bonding requirements; authorizes certain licensees to contract to use subdelegates for reloading funds on certain stored-value cards; relates to record retention, reporting requirements, and enforcement provisions; relates to exemptions; relates to money services Internet activities; relates to transmitting value and currency.

H.B. 2601

Signed by governor 4/12/18, Chapter 207

Rewrites the statutory exemption pertaining to securities transaction, including crowdfunding and virtual coin offering. Establishes residency for any entity created before Jan. 1, 2018 or that invests up to 95 percent of its investment assets in offerings. Increases the aggregate limit an issuer is allowed to raise to $5 million in a 12-month period. Modifies the necessary requirements for filing notice with the director. Allows all proceeds to be deposited into any depository institution, whether physical or virtual, that is authorized to do business in the state. Requires the issuer to file an amendment in writing to the director within 30 days if any information on the notice is inaccurate. Asserts that a purchaser compliant with the exemption is not considered an underwriter unless a purchaser purchases more than half of securities or virtual coins offered for sale. Specifies any claim relating to an offering shall be resolved by private arbitration between the parties. Allows the director to solicit offers with federal, state, and foreign regulators. Specifies that a person who facilitates the exchange of a virtual coin is not the dealer. Defines crowdfunding as raising small sums of money from a large group of people to fund a project. Confirms that security with reference to a virtual coin should not be more broadly construed than either securities act or pertinent federal regulation. Applies the statutory provisions against fraud to transactions involving virtual coins. Defines virtual coin as a value represented digitally that can be traded digitally and functions as a means of exchange, a unit of account and value. Prescribes a virtual coin offering as an offer for sale of a security or transaction pertaining to an intrastate offering or crowdfunding as outlined and further stipulates exclusions. Strikes archaic language.

S.B. 1091

Vetoed by governor 5/16/18

Requires the Department of Revenue to study each of the following: a. Whether a taxpayer may pay their income tax liability using a payment gateway that uses peer-to-peer systems; b. The conversion of cryptocurrency payments to U.S. dollars at the prevailing rate after receipt; and c. The process of crediting the taxpayer's account with the converted dollar amount received, less any fees or costs incurred for conversion.

Relates to income tax; relates to virtual currency. For taxable years beginning from and after Dec. 31, 2018, the bill provides that the amount of any net capital gain included in Arizona gross income for the taxable year that is derived from the exchange of virtual currency for other currency would adjust the gross income.

A.B. 1123

Died pursuant to Art. IV, Sec. 10(c) of the Constitution 2/1/18

This bill enacts the Virtual Currency Act. The bill prohibits a person from engaging in any virtual currency business, as defined, in this state unless the person is licensed by the commissioner of Business Oversight or is exempt from the licensure requirement, as provided. The bill requires applicants for licensure, including an applicant for licensure and approval to acquire control of a licensee, to pay the commissioner a specified nonrefundable application fee and complete an application form required to include, among other things, information about the applicant, prior virtual currency services provided by the applicant, a sample form of receipt for transactions involving the business of virtual currency, and specified financial statements. The bill makes these licenses subject to annual renewal and requires a renewal fee paid to the commissioner in a specified amount. The bill requires licensees to annually pay the commissioner a specified amount for each licensee branch office. The bill requires applicants and licensees to pay the commissioner a specified hourly amount for the commissioner’s examination costs, as provided. The bill also requires the commissioner to levy an assessment each fiscal year, on a pro rata basis, on licensees in an amount sufficient to meet the commissioner’s expenses in administering these provisions and to provide a reasonable reserve for contingencies. This bill requires each licensee to maintain at all times such capital as the commissioner determines, subject to specified factors, is sufficient to ensure the safety and soundness of the licensee, its ongoing operations, and maintain consumer protection. The bill requires each licensee to maintain a bond or trust account in U.S. dollars for the benefit of its consumers in the form and amount as specified by the commissioner. This bill authorizes the commissioner to examine the business and any branch office of any licensee to ascertain whether the business is being conducted in a lawful manner and all virtual currency is properly accounted for. The bill requires a licensee to file a report with the commissioner within a specified period of time after the licensee knows about the occurrence of certain events relating to the virtual currency business and those persons connected to that business, and to also maintain records as required by the commissioner for a specified period of time. With regard to enforcement, among other things, this bill, if it appears that a licensee is violating or failing to comply with these provisions or conducting business in an unsafe or injurious manner, authorizes the commissioner to order the licensee to comply or discontinue those practices. The bill also authorizes the commissioner to issue an order suspending or revoking a license, or placing a licensee in receivership, if after notice and an opportunity for a hearing, the commissioner makes a specified finding. The bill provides that every order, decision, or other official act of the commissioner is subject to review. This bill authorizes the commissioner to impose a civil penalty for a violation of these provisions. Within a specified period after the fiscal year, the bill requires a licensee to file with the commissioner a specified audit report. Within a specified period after the end of each calendar quarter, the bill would require a licensee to file with the commissioner a report containing financial statements verified by two of the licensee’s principal officers. This bill requires a licensee to provide a specified consumer protection disclosure and receipt to its consumers. This bill authorizes a virtual currency licensee in good standing that plans to engage in activities permitted under the Money Transmission Act to request that the commissioner convert his or her license into a license under the Money Transmission Act, as specified. The bill authorizes a person or entity conducting virtual currency business with less than $1 million in outstanding obligations and whose business model, as determined by the commissioner, represents low or no risk to consumers to register with a $500 license fee and, if approved, receive a provisional license to conduct virtual currency business. This bill requires a licensee, under the Money Transmission Act, to report to the commissioner its plan to engage in any virtual currency business and request permission to engage in that business subject to specified requirements and conditions, as determined by the commissioner. This bill makes these provisions including the Virtual Currency Act operative on July 1, 2018. Existing law, the General Corporation Law, prohibits a corporation, social purpose corporation, association, or individual from issuing or putting in circulation, as money, anything but the lawful money of the United States. This bill deletes that prohibition.

H.B. 1220

Postponed indefinitely 4/30/18

The bill subjects persons who offer cryptocurrency 'wallets', buy or sell cryptocurrencies, or exchange cryptocurrency with fiat currency to regulation under the 'Money Transmitters Act'. The bill defines cryptocurrency (e.g., bitcoin) and fiat currency.

H.B. 1426

Failed to pass Senate 5/9/18

The bill exempts the transmission of virtual currency from regulation under the Colorado 'Money Transmitters Act'.

S.B. 240

Postponed indefinitely 4/25/18

Enacts the 'Revised Uniform Unclaimed Property Act' (act), as adopted by the National Conference of Commissioners on Uniform State Laws in 2016 with Colorado-specific amendments, includes virtual currency.

S.B. 277

Failed to pass Senate 5/7/18

The bill exempts the transmission of virtual currency from regulation under the Colorado 'Money Transmitters Act'.

H.B. 5001

Failed Joint Favorable deadline 3/22/18

Imposes a fee on transactions involving virtual currency.

H.B. 5496

Failed Joint Favorable deadline 3/22/18

Regulates businesses that conduct virtual-currency business activity.

Studies the impact that digital currency, blockchain and smart contracts have on state law and businesses.

Enacts the Revised Unclaimed Property Act. Includes virtual currency.

Requires the state revenue commissioner to accept cryptocurrencies for payment of taxes and license fees; to require conversion of cryptocurrency payments into U.S. dollars.

H.B. 2234

S.B. 2871

Requires marketplace facilitators, referrers, and remote sellers that meet certain requirements to remit general excise or use taxes or report sales information. Applies to taxable years beginning after Dec. 31, 2019.

H.B. 2257

To conference committee 4/20/18

S.B. 3082

Passed Senate 3/6/18

Extends the money transmitters act to expressly apply to persons engaged in the transmission of virtual currency.  Requires licensees dealing with virtual currency to provide a warning to customers prior to entering into an agreement with the customers.

Requests the auditor to conduct a sunrise analysis of the regulation of virtual currency business activities.

Adopts the Uniform Regulation of Virtual Currency Businesses Act and codifies the Act into law.

Amends the laws relating to money transmitters to include virtual currency as a money transmission.

Defines "virtual currency" within the Money Transmitters Act. Clarifies that the permissible investment requirements for money transmitter licensees shall not apply to money transmissions of virtual currency.

Requests the auditor to conduct a sunrise analysis of the regulation of virtual currency business activities.

Repeals, amends and adds to existing law regarding the Idaho Unclaimed Property Act. Include virtual currencies.

Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Provides that, in addition to any other method of payment provided for by law, the Department shall accept payment for any tax imposed by the State and administered by the Department by cryptocurrency. Provides that the Department shall convert such payments to United States dollars at the prevailing rate within 24 hours after receipt of the payment and shall credit the taxpayer's account with the converted dollar amount.

H.B. 394

Signed by governor 4/13/18, Act 163

Establishes KRS Chapter 393A and creates new sections thereof to enact the Revised Uniform Unclaimed Property Act of 2016; submits a report on the status of the abandoned property fund to the Legislative Research Commission by Dec. 15, 2018. Includes virtual currency.

H.B. 1634

Signed by governor 5/15/18, Chapter 731

S.B. 1068

Signed by governor 5/15/18, Chapter 732

The bill requires MFCPC to study: cryptocurrencies, initial coin offerings, cryptocurrency exchanges, and other blockchain technologies; the Consumer Financial Protection Bureau (CFPB) arbitration rule and the Model Consumer and Employee Justice Enforcement Act; and the possible exemption of retailers of manufactured homes from the definition of “mortgage originator” in federal law.

Includes cryptocurrency in definitions in embezzlement section in penal code.

Provides for definition of cryptocurrency in money laundering definition section of penal code.

Relates to crimes involving credit cards; includes cryptocurrency and distributed ledger technology in definition section of credit chapter in penal code.

Adopts the Nebraska Virtual Currency Money Laundering Act and define and redefine terms under the Nebraska Money Transmitters Act. Includes definition of distributed ledger technology.

Adopts the Uniform Regulation of Virtual-Currency Businesses Act.

This bill, the “Digital Currency Jobs Creation Act,” establishes a regulatory framework for digital currency businesses to operate in New Jersey and creates certain incentives for digital currency businesses to locate in the state.

A.B. 8783

Passed Senate 6/19/18

S.B. 9013

Substituted 6/19/18

Creates the digital currency task force to provide the governor and the legislature with information on the potential effects of the widespread implementation of digital currencies on financial markets in the state.

A.B. 9685

S.B. 7725

Establishes a task force to study the impact of a state-issued cryptocurrency on the state of New York.

Establishes that state agencies are allowed to accept cryptocurrencies such as bitcoin, ethereum, litecoin and bitcoin cash as payment.

Establishes a task force to study the potential designation of economic empowerment zones for the mining of cryptocurrencies in the state of New York.

Relates to the audit of cryptocurrency business activity by third party depositories and prohibits licensing fees to conduct such cryptocurrency business activity.

Relates to creating pilot programs to incentivize consumers to buy locally; up to 10 pilot projects may be created in regions across the state that incorporate the principles of community currency or local community dollars.

Creates the digital currency task force to provide the governor and the legislature with information on the potential effects of the widespread implementation of digital currencies on financial markets in the state.

H.B. 86

Signed by governor 6/22/18, Chapter 23

Makes clarifying changes to permissible investments and statutory trust under the Money Transmitters Act; provides that if a licensee possesses virtual currency as permissible investments, the Commissioner may at any time request that the licensee verify the aggregate virtual currency transmission obligations outstanding and virtual currency held as permissible investments, including virtual currency stored offline.

Establishes the Cash Depository Corporation as an independent public corporation; prescribes the corporation's purposes and powers; directs the Corporation to lease or acquire real property and to construct or renovate offices, facilities and business locations at which the corporation receives, handles, stores and dispenses cash and other valuable property; establishes the Cash Depository Corporation Fund; requires the corporation to deposit all moneys into the Fund, includes digital currencies.

This bill proposes to require entities that host third-party sales to collect sales tax or follow notice requirements.

Relates to blockchain, cryptocurrency, and financial technology.

S.B. 269

Signed by governor 5/30/18, Act 205

This act modifies the definition of “blockchain” and “blockchain technology”; enables the creation and regulation of personal information protection companies; creates studies for expanding the use and promotion of blockchain technology; enables the creation of blockchain-based limited liability companies; and creates a study for the potential use of blockchain technology in government records.

Directs the State Corporation Commission to conduct a study of the effects of the growth of cryptocurrencies. The Commission shall report its findings to the members of the General Assembly by Dec. 1, 2018.

Repeals chapter 63.29 RCW (the uniform unclaimed property act) and establishes a revised uniform unclaimed property act. Includes virtual currency.

Prohibits a marijuana producer, processor, or retail outlet from paying with or accepting virtual currency for the purchase or sale of marijuana or marijuana products.

Requests the Joint Committee on Government and Finance study Bitcoin, its future and potential impact on the state, it’s citizens, and businesses.

H.B. 19

Signed by governor 3/7/18, Chapter 3

Relates to trade and commerce; amends the Wyoming Money Transmitter Act to provide an exemption for virtual currency.

H.B. 70

Signed by governor 3/10/18, Chapter 44

Relating to securities; provides that a person who develops, sells or facilitates the exchange of an open blockchain token is not subject to specified securities and money transmission laws.

S.B. 111

Signed by governor 3/10/18, Chapter 45

Exempts virtual currencies from property taxation.