HF 4717

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/20/2024 01:24pm

A bill for an act
relating to commerce; defining terms relating to virtual currency; adding additional
disclosure requirements for virtual currency transactions; amending Minnesota
Statutes 2023 Supplement, section 53B.69, by adding subdivisions; proposing
coding for new law in Minnesota Statutes, chapter 53B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2023 Supplement, section 53B.69, is amended by adding
a subdivision to read:

new text begin Subd. 3a. new text end

new text begin Transaction hash. new text end

new text begin "Transaction hash" means a unique identifier made up of
a string of characters that act as a record of and provides proof that the transaction was
verified and added to the blockchain.
new text end

Sec. 2.

Minnesota Statutes 2023 Supplement, section 53B.69, is amended by adding a
subdivision to read:

new text begin Subd. 6a. new text end

new text begin Virtual currency address. new text end

new text begin "Virtual currency address" means an alphanumeric
identifier representing a destination for a virtual currency transfer that is associated with a
virtual currency wallet.
new text end

Sec. 3.

Minnesota Statutes 2023 Supplement, section 53B.69, is amended by adding a
subdivision to read:

new text begin Subd. 10. new text end

new text begin Virtual currency kiosk. new text end

new text begin "Virtual currency kiosk" means an electronic terminal
acting as a mechanical agent of the licensee to enable the licensee to facilitate the exchange
of virtual currency for money, bank credit, or other virtual currency, including but not
limited to by (1) connecting directly to a separate virtual currency exchanger that performs
the actual virtual currency transmission, or (2) drawing upon the virtual currency in the
possession of the electronic terminal's licensee.
new text end

Sec. 4.

Minnesota Statutes 2023 Supplement, section 53B.69, is amended by adding a
subdivision to read:

new text begin Subd. 11. new text end

new text begin Virtual currency wallet. new text end

new text begin "Virtual currency wallet" means a software
application or other mechanism providing a means to hold, store, or transfer virtual currency.
new text end

Sec. 5.

new text begin [53B.75] VIRTUAL CURRENCY KIOSKS.
new text end

new text begin Subdivision 1. new text end

new text begin Disclosures on material risks. new text end

new text begin (a) Before entering into an initial virtual
currency transaction for, on behalf of, or with a person, the virtual currency kiosk licensee
must disclose in clear, conspicuous, and legibly written English all material risks generally
associated with virtual currency. The disclosures must be displayed on the screen of the
virtual currency kiosk with the ability for a person to acknowledge the receipt of the
disclosures. The disclosures must include at least the following information:
new text end

new text begin (1) virtual currency is not backed or insured by the government, and accounts and value
balances are not subject to Federal Deposit Insurance Corporation, National Credit Union
Administration, or Securities Investor Protection Corporation protections;
new text end

new text begin (2) some virtual currency transactions are deemed to be made when recorded on a public
ledger, which may not be the date or time when the person initiates the transaction;
new text end

new text begin (3) virtual currency's value may be derived from market participants' continued
willingness to exchange fiat currency for virtual currency, which may result in the permanent
and total loss of a particular virtual currency's value if the market for virtual currency
disappears;
new text end

new text begin (4) a person who accepts a virtual currency as payment today is not required to accept
and might not accept virtual currency in the future;
new text end

new text begin (5) the volatility and unpredictability of the price of virtual currency relative to fiat
currency may result in a significant loss over a short period;
new text end

new text begin (6) the nature of virtual currency may lead to an increased risk of fraud or cyber attack;
new text end

new text begin (7) the nature of virtual currency means that any technological difficulties experienced
by the licensees may prevent access to or use of a person's virtual currency; and
new text end

new text begin (8) any bond maintained by the licensee for the benefit of a person may not cover all
losses a person incurs.
new text end

new text begin (b) The virtual currency kiosk licensee must provide an additional disclosure, which
must be acknowledged by the person, written prominently and in bold type, and provided
separately from the disclosures above, stating: "WARNING: LOSSES DUE TO
FRAUDULENT OR ACCIDENTAL TRANSACTIONS MAY NOT BE RECOVERABLE
AND TRANSACTIONS IN VIRTUAL CURRENCY ARE IRREVERSIBLE."
new text end

new text begin Subd. 2. new text end

new text begin New account disclosures. new text end

new text begin When opening an account for a person a virtual
currency kiosk licensee has not previously opened an account for, and before entering into
an initial virtual currency transaction for, on behalf of, or with the person, a virtual currency
kiosk licensee must disclose all relevant terms and conditions generally associated with the
products, services, and activities of the licensee and virtual currency. A virtual currency
licensee must make the disclosures in clear, conspicuous, and legibly written English, using
at least 48-point sans serif type font. The disclosures under this subdivision must address
at least the following:
new text end

new text begin (1) the person's liability for unauthorized virtual currency transactions;
new text end

new text begin (2) the person's right to:
new text end

new text begin (i) stop payment of a preauthorized virtual currency transfer and the procedure to stop
payment;
new text end

new text begin (ii) receive periodic account statements and valuations from the licensee;
new text end

new text begin (iii) receive a receipt, trade ticket, or other evidence of a transaction; and
new text end

new text begin (iv) prior notice of a change in the licensee's rules or policies;
new text end

new text begin (3) under what circumstances the licensee, without a court or government order, discloses
a person's account information to third parties; and
new text end

new text begin (4) other disclosures that are customarily provided in connection with opening a person's
account.
new text end

new text begin Subd. 3. new text end

new text begin Prior to transaction disclosures. new text end

new text begin Before each virtual currency transaction for,
on behalf of, or with a person, a virtual currency kiosk licensee must disclose the transaction's
terms and conditions in clear, conspicuous, and legibly written English, using at least 48-point
sans serif type font. The disclosures under this subdivision must address at least the following:
new text end

new text begin (1) the amount of the transaction;
new text end

new text begin (2) any fees, expenses, and charges, including applicable exchange rates;
new text end

new text begin (3) the type and nature of the transaction;
new text end

new text begin (4) a warning that once completed, the transaction may not be reversed, if applicable;
new text end

new text begin (5) a daily virtual currency transaction limit of no more than $1,000;
new text end

new text begin (6) the difference in the virtual currency's sale price versus the current market price; and
new text end

new text begin (7) other disclosures that are customarily given in connection with a virtual currency
transaction.
new text end

new text begin Subd. 4. new text end

new text begin Acknowledgment of disclosures. new text end

new text begin A virtual currency kiosk licensee must ensure
that each person who engages in a virtual currency transaction using the virtual currency
licensee's kiosk acknowledges receipt of all the disclosures required under this section.
Additionally, upon a transaction's completion, the virtual currency licensee must provide a
person with a receipt containing the following information:
new text end

new text begin (1) the licensee's name and contact information, including a telephone number to answer
questions and register complaints;
new text end

new text begin (2) the type, value, date, and precise time of the transaction, transactional hash, and each
virtual currency address;
new text end

new text begin (3) the fee charged;
new text end

new text begin (4) the exchange rate, if applicable;
new text end

new text begin (5) a statement of the licensee's liability for nondelivery or delayed delivery;
new text end

new text begin (6) a statement of the licensee's refund policy; and
new text end

new text begin (7) any additional information the commissioner of commerce may require.
new text end

new text begin Subd. 5. new text end

new text begin Fees. new text end

new text begin The licensee of a virtual currency kiosk is prohibited from collecting fees,
whether direct or indirect, from a person related to a single digital financial asset transaction
that exceeds the greater of either:
new text end

new text begin (1) $5; or
new text end

new text begin (2) ten percent of the United States dollar equivalent of digital financial assets involved
in the transaction, according to the publicly quoted market price of the digital asset on a
licensed digital financial asset exchange at the time the person initiates the transaction.
new text end

new text begin Subd. 6. new text end

new text begin Cancellation and refund. new text end

new text begin A virtual currency kiosk licensee must, at the
licensee's cost and within 72 hours after a virtual currency transaction, allow the person to
cancel and receive a full refund for the virtual currency transaction if the virtual currency
transaction is:
new text end

new text begin (1) the person's first virtual currency transaction with the licensee; and
new text end

new text begin (2) to a virtual currency wallet or exchange located outside of the United States.
new text end