Leawood, Kan. – December 23, 2022: Last month, the Governor signed into law Senate Bill 9360 and the twin bill Assembly Bill 7742. The twin bills are now known as 2022 Sess. Law News of N.Y. Ch. 640 (S. 9360) (known in this CARD Alert as “SL 640”). The twin bills became effective immediately on November 22, 2022.
The session law requires “[a]ny virtual currency held or owing by any banking organization, corporation or other entity engaged in virtual currency business activity which shall have remained unclaimed” for “five years shall be deemed abandoned property if (i) the last known address of the person entitled to such virtual currency as shown on the books and records of the entity engaging in the virtual currency business activity is located in the state; or (ii) the last known address of the person entitled to such virtual currency is not shown on the books and records of the entity engaging in the virtual currency business activity and the entity is incorporated in this state.” Id. at §2 (S. 9360).
Pursuant to SL 640, virtual currency is defined as the meaning given to it in 23 NYCRR 200.2(p). Id. at §1. 23 NYCRR 200.2(p) defines virtual currency as “any type of digital unit that is used as a medium of exchange or a form of digitally stored value,” which shall be “broadly construed to include digital units of exchange that: have a centralized repository or administrator; are decentralized and have no centralized repository or administrator; or may be created or obtained by computing or manufacturing effort.” This definition explicitly excludes digital units used (i) solely within online gaming platforms; (ii) as part of a customer affinity or rewards program; and (iii) digital units used as part of Prepaid Cards.
The session law also defines “virtual currency business activity,” by giving it the meaning in 23 NYCRR 200.2(q). Id. at §1. 23 NYCRR 200.2(q) defines virtual currency business activity as, “the conduct of any one of the following types of activities involving New York or a New York Resident: (1) receiving Virtual Currency for Transmission or Transmitting Virtual Currency, except where the transaction is undertaken for non-financial purposes and does not involve the transfer of more than a nominal amount of Virtual Currency; (2) storing, holding, or maintaining custody or control of Virtual Currency on behalf of others; (3) buying and selling Virtual Currency as a customer business; (4) performing Exchange Services as a customer business; or (5) controlling, administering, or issuing a Virtual Currency.” Virtual currency business activity does not include the “development or dissemination of software in and of itself.” Id.
To read the Session Law click here: 2022 Sess. Law News of N.Y. Ch. 640 (S. 9360).
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