HB2798 - Relating to disclosures and other requirements concerning virtual currency kiosk transactions; authorizing a fee.

      By: Plesa, Capriglione, Garcia of Dallas, H.B. No. 2798       Lambert, et al.     A BILL TO BE ENTITLED   AN ACT   relating to disclosures and other requirements concerning virtual   currency kiosk transactions; authorizing a fee.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle E, Title 3, Finance Code, is amended by   adding Chapter 161 to read as follows:   CHAPTER 161. VIRTUAL CURRENCY KIOSKS           Sec. 161.001.  DEFINITIONS. In this chapter:                 (1)     "Digital asset service provider" has the meaning   assigned by Section 160.001.                 (2)     "Transaction hash" means a unique identifier   consisting of a string of characters that act as a record of a   transaction and provide proof that the transaction was verified and   added to the blockchain.                 (3)     "Virtual currency" has the meaning assigned by   Section 12.001, Business & Commerce Code.                 (4)     "Virtual currency kiosk" means an electronic   terminal in this state operated by a virtual currency kiosk   operator to enable the operator to facilitate the exchange of   virtual currency for money, bank credit, or other virtual currency,   including by:                       (A)     connecting directly to a separate virtual   currency exchanger that performs the actual virtual currency   transmission; or                       (B)     drawing on the virtual currency in the   possession of the electronic terminal's operator.                 (5)     "Virtual currency kiosk operator" or "operator"   means a person, including a digital asset service provider, that   operates a virtual currency kiosk.                 (6)     "Virtual currency kiosk transaction" means a   transaction conducted or performed, wholly or partly, by electronic   means using a virtual currency kiosk. The term includes a   transaction made at a virtual currency kiosk to purchase virtual   currency with fiat currency or to sell virtual currency for fiat   currency.           Sec.   161.002.     APPLICABILITY. This chapter applies to a   virtual currency kiosk operator that operates a virtual currency   kiosk in this state.           Sec.   161.003.     DISCLOSURES ON MATERIAL RISKS. (a)   Before   entering into an initial virtual currency kiosk transaction for, on   behalf of, or with a customer and subject to Subsection (c), a   virtual currency kiosk operator shall clearly and conspicuously   disclose, in plain, easy to read language, at least the following   material risks generally associated with virtual currency:                 (1)     virtual currency is not legal tender and is not   backed or insured by the government;                 (2)     accounts and value balances of virtual currency   are not subject to Federal Deposit Insurance Corporation, National   Credit Union Administration, or Securities Investor Protection   Corporation protections;                 (3)     some virtual currency transactions are considered   to be made only when recorded on a public ledger, which may not be   the date or time when the transaction is initiated;                 (4)     a virtual currency's value may be derived from the   continued willingness of market participants to exchange fiat   currency for the virtual currency, which may result in the   permanent and total loss of the virtual currency's value if the   market for that virtual currency disappears;                 (5)     a customer who accepts a virtual currency as   payment at the time of the transaction is not required to accept the   currency as payment and may decline to accept the currency as   payment in a future transaction;                 (6)     the volatility and unpredictability of the price   of virtual currency relative to fiat currency may result in a   significant loss in value over a short period;                 (7)     the nature of virtual currency means that any   technological difficulties experienced by a virtual currency kiosk   operator may prevent access to or use of their customers' virtual   currency; and                 (8)     any bond maintained by the virtual currency kiosk   operator for the benefit of the operator's customers may not cover   all of the losses incurred by those customers.           (b)     In addition to the disclosures under Subsection (a), a   virtual currency kiosk operator shall provide a written disclosure   that:                 (1)  is prominently displayed and in bold type;                 (2)  must be acknowledged by the customer;                 (3)     is provided separately from the disclosures under   Subsection (a); and                 (4)  states:                       "WARNING: LOSSES DUE TO FRAUDULENT OR ACCIDENTAL   TRANSACTIONS ARE NOT RECOVERABLE AND TRANSACTIONS IN VIRTUAL   CURRENCY ARE IRREVERSIBLE.   VIRTUAL CURRENCY TRANSACTIONS MAY BE   USED BY SCAMMERS IMPERSONATING LOVED ONES, THREATENING JAIL TIME,   OR INSISTING YOU WITHDRAW MONEY FROM YOUR BANK ACCOUNT TO PURCHASE   VIRTUAL CURRENCY."           (c)     The disclosures under Subsection (a) must be displayed   on the screen of the virtual currency kiosk with the ability for a   customer to acknowledge the receipt of the disclosures.           Sec.   161.004.     TRANSACTION-RELATED DISCLOSURES. (a) A   virtual currency kiosk operator shall disclose all relevant terms   generally associated with virtual currency and with the products,   services, and activities of the operator, including:                 (1)     the customer's liability for unauthorized virtual   currency transactions;                 (2)  the customer's right to:                       (A)     stop payment of a virtual currency transfer   and the procedure to stop payment;                       (B)     receive a receipt, trade ticket, or other   evidence of a transaction at the time of the transaction; and                       (C)     receive prior notice of a change in the   operator's rules or policies;                 (3)     the circumstances under which the operator,   without a court or government order, is authorized to disclose a   customer's account information to third parties; and                 (4)     other disclosures customarily provided in   connection with the opening of a customer's account.           (b)     Before a virtual currency transaction is entered into   for, on behalf of, or with a customer, a virtual currency kiosk   operator shall clearly and conspicuously disclose the terms of the   transaction. The disclosure must:                 (1)  be in plain, easy to read language; and                 (2)  address at least:                       (A)  the amount of the transaction;                       (B)     any transaction fees, expenses, or charges,   including applicable exchange rates;                       (C)  the type and nature of the transaction;                       (D)     a warning that once a transaction is   completed, the transaction may not be reversed;                       (E)     the daily virtual currency kiosk transaction   limit for new customers prescribed by Section 161.008;                       (F)     the difference in the virtual currency's sale   price compared to the current market price; and                       (G)     any other disclosures customarily provided   in connection with a virtual currency kiosk transaction.           Sec.   161.005.     ACKNOWLEDGEMENT OF DISCLOSURES. Before   completing a transaction, a virtual currency kiosk operator shall   ensure that each customer who engages in a virtual currency kiosk   transaction using the operator's kiosk acknowledges receipt of the   disclosures required under Sections 161.003 and 161.004 by   obtaining confirmation of consent.           Sec.   161.006.     RECEIPT REQUIRED. After a transaction is   completed, the virtual currency kiosk operator shall provide the   customer with a physical receipt, or an electronic receipt sent by   e-mail or text message, that contains:                 (1)     the operator's name and contact information,   including a telephone number to answer questions and register   complaints;                 (2)     the type, value, date, and precise time of the   transaction, the transaction hash, and each virtual currency   address;                 (3)  the fees charged;                 (4)  the exchange rate;                 (5)     a statement of the operator's liability for   nondelivery or delayed delivery;                 (6)  a statement of the operator's refund policy; and                 (7)     any additional information the banking   commissioner of Texas may require.           Sec.   161.007.     COMPLAINT AND REPORT; FEE REFUND. (a) Not   later than the 14th day after the date that a customer enters into a   virtual currency kiosk transaction, if the customer believes the   transaction was fraudulently induced, the customer may file a   complaint with:                 (1)     the operator of the virtual currency kiosk on   which the transaction was completed; and                 (2)     an appropriate law enforcement agency or state   agency.           (b)     A law enforcement agency or state agency that receives a   complaint under Subsection (a) shall:                 (1)  investigate the complaint; and                 (2)     provide a report to the customer and the operator   of the virtual currency kiosk stating whether or not the virtual   currency kiosk transaction was fraudulently induced [Text truncated for display. Full text available on Congress.gov.]