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  | H.B.  No.  1666 |
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  | relating to the commingling of funds by digital asset service | |
  | providers; providing an administrative penalty. | |
  |              BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | |
  |              SECTION  1.    Subtitle E, Title 3, Finance Code, is amended by | |
  | adding Chapter 160 to read as follows: | |
  | CHAPTER 160. DIGITAL ASSET SERVICE PROVIDERS | |
  |              Sec.  160.001.    DEFINITIONS. In this chapter: | |
  |                          (1)    "Commission"  means the Finance Commission of | |
  | Texas. | |
  |                          (2)    "Customer funds" means the digital assets, fiat | |
  | currency, or other property deposited by a digital asset customer. | |
  |                          (3)    "Department" means the Texas Department of | |
  | Banking. | |
  |                          (4)    "Digital asset" means a natively electronic asset | |
  | that confers economic, proprietary, or access rights and is | |
  | recorded or stored in a blockchain, cryptographically secured | |
  | distributed ledger, or similar technology, and includes: | |
  |                                      (A)    a digital asset that the laws of any country | |
  | consider to be legal tender; or | |
  |                                      (B)    virtual currency as defined by Section | |
  | 12.001, Business & Commerce Code. | |
  |                          (5)    "Digital asset customer" means a person who | |
  | deposits fiat currency or a digital asset with a digital asset | |
  | service provider. | |
  |                          (6)    "Digital asset service provider" means an | |
  | electronic platform that facilitates the trading of digital assets | |
  | on behalf of a digital asset customer and maintains custody of the | |
  | customer's digital assets. | |
  |              Sec.  160.002.    ADMINISTRATION.  The department shall | |
  | administer this chapter. | |
  |              Sec.  160.003.    APPLICABILITY. (a) This chapter applies to a | |
  | digital asset service provider doing business in this state that: | |
  |                          (1)    holds a money transmission license under | |
  | Subchapter D, Chapter 151; and | |
  |                          (2)    either: | |
  |                                      (A)    serves more than 500 digital asset customers | |
  | in this state; or | |
  |                                      (B)    has at least $10 million in customer funds. | |
  |              (b)    This chapter does not apply to: | |
  |                          (1)    a bank, as defined by Section 31.002; or | |
  |                          (2)    an entity excluded by commission rule or by order | |
  | of the banking commissioner based on a finding that the entity is: | |
  |                                      (A)    not required to hold a money transmission | |
  | license under Subchapter D, Chapter 151; or | |
  |                                      (B)    not subject to the requirements of this | |
  | chapter. | |
  |              Sec.  160.004.    DUTIES OF DIGITAL ASSET SERVICE PROVIDERS. | |
  | (a) Except as provided by this chapter, a digital asset service | |
  | provider may not: | |
  |                          (1)    commingle customer funds with funds belonging to | |
  | the digital asset service provider, including the digital asset | |
  | service provider's: | |
  |                                      (A)    operating capital; | |
  |                                      (B)    proprietary accounts; | |
  |                                      (C)    digital assets; | |
  |                                      (D)    fiat currency; or | |
  |                                      (E)    other property that is not customer funds; | |
  |                          (2)    use customer funds to secure or guarantee a | |
  | transaction other than a transaction for the customer contributing | |
  | the funds; or | |
  |                          (3)    maintain customer funds in such a manner that a | |
Statutes affected: Introduced: () House Committee Report: () Engrossed: () Senate Committee Report: () Enrolled: () |