A Quick Summary of Pending Cryptocurrency Legislation in All 50 States
With the crypto industry’s dramatic loss in market capitalization over the past few weeks, some of the shimmering, gravitational pull has rocked digital assets. As a result, some of the momentum behind legislative efforts related to digital assets and technology may have been lost this year. But digital assets and the blockchain technology they reside on will likely continue to interest investors and consumers and play an important, if sometimes disruptive, role in modern economies.
As a result, state legislatures are likely to pass several crypto-related bills that vary widely in purpose and scope, including proposals that clarify existing regulations, create new regulatory frameworks, and dedicate development resources. the state to support or study the impact and use of digital assets. . This month, the National Conference of State Legislatures reviewed pending legislation in each of the US states and territories. SeeHeather Morton (June 6, 2022), Cryptocurrency Legislation 2022,NCLS.ORG. This article synthesizes and summarizes the content of this publication, with an emphasis on identifying general trends in the subject of pending bills.
Despite significant legislative interest in crypto, not all states have pending bills this year. The Nevada, North Dakota and Texas legislatures are in recess during this fiscal year, with no regular sessions scheduled. Others have not introduced digital asset legislation. At the time of the NCLS report, the following states and territories had not introduced digital asset legislation in 2022: Arkansas, Delaware, DC, Puerto Rico, Guam, Maine, Maryland, Texas, Nevada, US Virgin Islands, Wisconsin and South Dakota. .
New York, Hawaii, and Arizona are among the jurisdictions with the most pending bills related to crypto and digital assets. Bills introduced in New York include one that would create a moratorium on cryptocurrency mining hubs. Another would create new criminal offenses including for token fraud, carpet draws, private key fraud and fraudulent failure to disclose interests in virtual tokens. New York would also require certain disclosures in advertisements involving virtual tokens. California also has significant substantive legislation pending.
Legislative proposals pending
Below is a list of the topics covered by the most common pending bills and the states in which they have been proposed. These proposals would:
(1) Permit or prohibit some or all political subdivisions or agencies from paying employees and others in virtual currency, accepting payments in virtual currency, or using virtual currency as collateral in state funding .
- Arizona- SB 1493
- California – AB 2689
- Hawaii – SB 2696
- Colorado- SB 25 (Sent to Governor 5/17/22)
- Illinois- HB 5287 (House passed on 02/24/22)
- Louisiana — HB 741
- Utah- HB 456 (Signed by Governor 3/24/22, Chapter 405)
- Tennessee- SB 535 (Signed by Governor 4/14/22, Public Chapter 861
(2) Organize or pursue state efforts for the study and analysis of the use of digital assets on a large scale or for certain purposes.
- New York
(3) Define separate digital assets and classify them in the Uniform Commercial Code for various purposes, including the regulation of security interests in digital assets and control and priority mechanisms.
- Connecticut-SB 353
- Indiana- SB 351 (signed by Governor 3/14/22, Public Law 110
- Iowa- HF 244. (sent to Governor 06/03/22
- Kentucky- SC 17
- New Hampshire- HB 1502, HB 1503 (Passed both rooms on 05/26/22)
- Ohio- HB 585
(4) Establish a regulatory system and create or assign bureaucratic agencies to govern all or part of business activities involving digital assets.
(5) Authorize certain entities to act as custodians of digital assets or otherwise regulate the custody of digital assets.
- Illinois- SB 3435
- Louisiana – HB 802 (registered on 02/06/22)
- Nebraska – LB 707 (signed by the Governor on 04/18/22)
- Rhode Island – HB 7254
- Virginia –HB 263 (signed by Governor 4/11/22, Chapter 623)
(6) Establish a license or registration requirement for digital assets or virtual currency businesses, or for issuers of tokens.
(7) Exempt virtual currency or other digital assets from certain aspects of taxation.
(8) Update unclaimed property laws to include virtual currencies.
- West Virginia
- New York
(9) Create programs to educate the public about e-commerce, cybersecurity and virtual currency.
(10) Allow private entities to accept virtual currency as payment for any good or service
(11) Prohibit or allow the acceptance of cryptocurrency by political campaigns or public officials.
(12) Provide or modify the rules governing the formation and management of decentralized autonomous organizations.
Links to all invoices and additional proposal coverage are available in the NCSL article referenced above.
Additional important invoices
Significant additional proposals are bills that: (a) would prohibit Hawaii from encumbrances on mediums of exchange (including cryptography) in certain circumstances; (b) revise several Florida requirements related to money transfer activity, including provisions directly related to virtual currency; (c) establish specific discovery procedures and rules to be applied in Illinois disputes involving digital assets; and (d) Minnesota, expressly permit the use of certificate tokens in lieu of shares and the use of electronic networks and databases to record ownership of shares and other documents. Finally, New Hampshire legislation would exempt those involved in issuing or trading tokens from certain restrictions from certain securities laws and a New Jersey bill would provide for the regulation of digital payment platforms.
For the most part, the fate or destiny of these bills is unknown. In Mississippi, however, many proposals similar to those listed above have already died in committee. Given the changing environment, investors and companies doing business with digital assets should continue to diligently monitor legislative developments in the places where they do business.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.