Sections 2-56 of this bill set forth the Digital Financial Asset Business Activity Law, which, in general, requires persons engaged in certain business activity involving digital financial assets to obtain a license from the Division of Financial Institutions of the Department of Business and Industry. Section 9 of this bill defines “digital financial asset business activity” to mean, in general: (1) exchanging, transferring or storing digital financial assets or engaging in digital financial asset administration; (2) holding electronic precious metals or electronic certificates representing interests in such metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals; or (3) exchanging digital representations of value used within certain online games for a digital financial asset or legal tender or bank credit offered by or on behalf of the publisher of the game. Section 25 of this bill provides that the provisions of this bill apply, with certain exceptions, to a person who engages in digital financial asset business activity with or on behalf of a resident of this State. Section 26 of this bill prohibits a person from engaging in digital financial asset business activity unless the person has obtained a license from the Division or is exempt from licensure. Section 27 of this bill sets forth the application requirements and procedures for a person to obtain a license to conduct digital financial asset business activity. Section 28 of this bill authorizes the Division to issue a conditional license to an applicant who holds a license to engage in virtual-currency business activity in the State of New York under certain circumstances. Section 29 of this bill requires an applicant to: (1) deposit with the Division and maintain while licensed a surety bond; or (2) establish and maintain while licensed a trust account. Section 29 also requires an applicant to submit evidence of and maintain while licensed a minimum amount of capital, as determined by the Division. Section 30 of this bill authorizes an applicant whose application is denied to appeal the denial. Section 31 of this bill sets forth requirements for renewing a license to conduct digital financial asset business activity. Section 32 of this bill provides that a license is not transferable or assignable. Section 33 of this bill authorizes the Division to adopt regulations to implement the provisions of this bill. Section 34 of this bill: (1) requires the Division to provide certain guidance concerning licensure upon request; and (2) authorizes the Division to issue advisory opinions and other written guidance. Section 35 of this bill authorizes the Division to conduct certain examinations of a licensee. Section 36 of this bill requires a licensee to maintain certain records related to the digital financial asset business activity of the licensee. Section 37 of this bill authorizes the Division to share certain information relating to a licensee with certain state or federal regulatory bodies. Sections 38 and 57 of this bill provide that certain records relating to the licensure of a person engaged in digital financial asset business activity are not public records. Section 39 of this bill requires a licensee to file with the Division a report of a change in: (1) the information in an application; (2) the conduct of the digital financial asset business activity of a licensee; and (3) an executive officer, responsible individual or person in control of the licensee. Section 40 of this bill requires a person who intends to take control of a licensee to obtain the approval of the Division and sets forth application procedures and requirements to obtain such approval. Section 41 of this bill sets forth similar requirements for a proposed merger or consolidation of a licensee with another person. Sections 42-48 of this bill authorize the Division to take certain enforcement actions against a person for certain violations of the provisions of this bill, which may include, among other actions, the suspension or revocation of a license and the imposition of civil penalties. Section 49 of this bill requires a licensee to make certain disclosures to a person who uses its products or services. Section 50 of this bill requires a licensee that has control of a digital financial asset for one or more persons to maintain an amount of each type of digital financial asset sufficient to satisfy the aggregate entitlements of the persons to the type of digital financial asset. Section 50 authorizes a licensee to fulfill this requirement by entering into certain agreements with each resident for whom the licensee has control of a digital financial asset. Sections 51 and 52 of this bill impose certain requirements on licensees with respect to the exchange of a digital financial asset. Section 53 of this bill requires a licensee to establish a toll-free telephone line through which a resident may contact the licensee. Section 54 of this bill prohibits a licensee from taking certain actions involving stablecoins, unless the issuer of the stablecoin meets certain requirements. Sections 55 and 56 of this bill require an applicant to create, and maintain during licensure, certain policies and procedures.

Statutes affected:
As Introduced: 239.010
BDR: 239.010