SF0125 – Digital assets-existing law

According to the summary provided by the Legislative Services Office:
“This act establishes the legal nature of digital assets within existing law, dividing these assets into three categories of intangible personal property and classifying these assets within the Uniform Commercial Code (UCC) as follows:
– Digital consumer assets (UCC: general intangibles);
– Digital securities (UCC: securities and investment property); and
– Virtual currency (UCC: money).

Specifies a method of perfection based on control relating to digital assets.

Provides that a transferee of a digital asset takes the asset free of any security interest two years after the transferee takes the asset for value and does not have actual notice of an adverse claim.

Authorizes banks to voluntarily provide custodial services for digital assets as provided by this act, consistent with the Securities and Exchange Commission’s qualified custodian requirements.

Clarifies a number of existing legal issues relating to the application of the SEC’s qualified custodian requirements in the context of digital assets, including the nature of the custodial relationship and treatment of the assets, exclusive control of an asset, consumer protection, as well as ancillary and subsidiary proceeds derived from these assets.

“Custodial services” is defined as the safekeeping and management of customer currency and digital assets as a custodian, including fund administration and the execution of customer instructions.

Imposes a supervisory fee on banks providing custodial services for digital assets to offset the Division of Banking’s administrative costs”.