Leawood, KS – February 17, 2022: The New York Senate has introduced Assembly Bill 7742 (AB 7742) which will add “virtual currency” to the definition of property subject to reporting requirements for unclaimed property, which shall take effect immediately upon passing. The bill was first introduced on May 21, 2021 and referred to the Assembly Ways and Means Committee on January 5, 2022, where it currently resides.
AB 7742 defines “virtual currency,” by reference to 23 NYCRR 200.2(p), 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 (i) have a centralized repository or administrator; (ii) are decentralized and have no centralized repository or administrator; or (iii) 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. AB 7742 defines “Prepaid Cards” as a reloadable electronic payment device that is usable at a single merchant, an affiliated group of merchants, or at multiple, unaffiliated merchants or service providers.
Pursuant to AB 7742, any 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 three 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.
AB 7742 defines “virtual currency business activity,” by reference to 23 NYCRR 200.2(q), as involving the conduct of New York or a New York Resident in (1) receiving 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 conversion or exchange services as a customer business; or (5) controlling, administering, or issuing a virtual currency. Under AB 7742, the development and dissemination of software in and of itself does not constitute virtual currency business activity.
To read New York Assembly Bill 7742 click here: New York AB 7742.
About the Compliance Libraries:
The Compliance Libraries provide a one stop location for comprehensive information on the laws, rules and standards regulating gift cards. Its range includes federal and state laws, GAAP accounting standards and tax rules along with other helpful items.
For more information visit www.compliancelibraries.com.
The Compliance Libraries are a service of Card Issuance & Management, Inc., a subsidiary of Card Compliant, LLC.