SB3765 103RD GENERAL ASSEMBLY

LRB103 39023 RTM 69160 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3765

Introduced 2/9/2024, by Sen. Laura Ellman

SYNOPSIS AS INTRODUCED:

103SB3666, Art. 25 heading new
103SB3666, 25-1 new
103SB3666, 25-5 new
103SB3666, 25-10 new
103SB3666, 25-15 new
103SB3666, 25-20 new
103SB3666, 25-25 new
103SB3666, 25-30 new

If and only if Senate Bill 3666 of the 103rd General Assembly becomes law, amends the Digital Assets Regulation Act. Provides that an operator shall not accept or dispense more than $1,000 or equivalent monetary value in a day from or to a customer via a digital asset kiosk. Sets forth provisions concerning customer disclosures, reporting physical addresses, and implementation of the provisions. Effective immediately or on the date Senate Bill 3666 of the 103rd General Assembly takes effect, whichever is later.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. If and only if Senate Bill 3666 of the 103rd General Assembly becomes law, then the Digital Assets Regulation Act is amended by adding Article 25 as follows:

(103SB3666, Art. 25 heading new)

ARTICLE 25. Digital Asset Kiosks

(103SB3666, 25-1 new)

Sec. 25-1. References to Article. This Article may be referred to as the Digital Asset Kiosks Law.

(103SB3666, 25-5 new)

Sec. 25-5. Definitions. As used in this Article:

"Charges" means:

(1) fees or expenses paid by the customer; and

(2) the difference between the market price of the digital asset and the price of the digital asset charged to the customer.

"Digital asset kiosk" means an automated teller machine that facilitates the buying, selling, or exchanging of digital assets for fiat currency or other digital assets.

"Registered digital asset exchange" means a digital asset exchange that is registered in this State pursuant to the Digital Assets Regulation Act and that is neither an operator nor controlled by the operator involved in a digital asset kiosk transaction.

"Operator" means a person who owns, operates, or manages a digital asset kiosk located in this State.

"Market price of the digital asset" means the current market price of a particular digital asset publicly quoted on a registered digital asset exchange for a particular time specified in this Article, subject to any rules adopted by the Department.

(103SB3666, 25-10 new)

Sec. 25-10. Daily transaction limit. An operator shall not accept or dispense more than $1,000 or equivalent monetary value in a day from or to a customer via a digital asset kiosk.

(103SB3666, 25-15 new)

Sec. 25-15. Customer charges limit. An operator may not directly or indirectly collect charges from a customer related to a single digital asset kiosk transaction that exceeds the greater of the following:

(1) $5; or

(2) 15% of digital assets involved in the transaction according to the market price of the digital asset at the time the customer initiates the transaction.

(103SB3666, 25-20 new)

Sec. 25-20. Customer disclosures.

(a)(1) Before engaging in each digital asset kiosk transaction with a customer, an operator shall provide a written disclosure, in English and in the same language principally used by the operator to advertise, solicit, or negotiate with a customer, containing the terms and conditions of the transaction that include, at a minimum, all of the following:

(A) The amount of the digital assets involved in the transaction.

(B) The amount, in United States dollars, of any charges collected by the operator.

(C) The United States dollar price of the digital assets that is charged to the customer and the United States dollar market price of the digital assets.

(D) If an operator does not provide a method to reverse or refund a transaction, a warning written prominently in bold type stating the following: "Warning: Losses due to fraudulent or accidental transactions may not be recoverable and transactions are irreversible."

(2) The disclosures required by this subsection shall be clear and conspicuous and provided separately from any other disclosure provided by the operator.

(b) An operator shall provide a customer with a receipt for any transaction made at the operator's digital asset kiosk that includes all of the following information:

(1) The name of the customer.

(2) The date and time of the transaction.

(3) The name and contact information of the operator.

(4) The amount of the digital assets involved in the transaction.

(5) The amount of United States dollars or other fiat currency involved in the transaction.

(6) The amount, in United States dollars, of any charges collected by the operator in relation to the transaction.

(7) The amount, in United States dollars, of any spread between the United States dollar price of the digital asset that is charged to the customer and the United States dollar market price of the digital asset.

(8) The name of the registered digital asset exchange that the operator used to calculate the spread described in paragraph (7).

(103SB3666, 25-25 new)

Sec. 25-25. Reporting physical addresses.

(a) An operator shall provide to the Department a list of all physical addresses of digital asset kiosks that the operator owns, operates, or manages in this State, in a form prescribed by the Department.

(b) An operator shall provide the Department with updates to the list required by subsection (a) of this Section within 30 days of any changes in a form prescribed by the Department.

(c) The Department shall make the list required by subsection (a) of this Section and contact information of each operator available to the public on the Department's website.

(103SB3666, 25-30 new)

Sec. 25-30. Implementation.

(a) An operator shall comply with the Digital Assets Regulation Act to the extent that the operator engages in digital asset business activity.

(b) If an operator does not engage in digital asset business activity but allows or facilitates another person to engage in digital asset business activity via a digital asset kiosk that is owned, operated, or managed by the operator, the operator shall do all of the following:

(1) On or after July 1, 2026, ensure that the person engaging in the digital asset business activity via the digital asset kiosk is registered pursuant to the Digital Assets Regulation Act or otherwise exempt from registration.

(2) Ensure that any charges collected from a customer, whether collected by the operator, a person engaging in digital asset business activity via the digital asset kiosk, or both, comply with the limits provided by Section 25-15.

(3) Comply with all other provisions of this Article.

(c) In addition to the fees and charges collected under Section 1-20 of the Digital Assets Regulation Act, the Department shall charge and collect fees from operators, which shall be nonrefundable unless otherwise indicated, as follows:

(1) Each operator shall pay $150 for each hour or part thereof for each examiner or staff assigned to the supervision of such operator plus actual travel costs for any examination of digital asset kiosk activity pursuant to this Article.

(2) On or after January 1, 2026, each operator shall pay an annual registration fee to the Department of $35,000 for each digital asset kiosk located in this State.

(3) Beginning one year after the effective date of this Article, the Department may, by rule, amend the fees set forth in this subsection in accordance with the Digital Assets Regulation Act.

All moneys collected or received by the Department under this Article shall be deposited into the Consumer Protection Fund pursuant to Section 1-20 of the Digital Assets Regulation Act.

(d) On or after January 1, 2026, a violation of this Article is enforceable as a violation of Article 5 of the Digital Assets Regulation Act.

Section 99. Effective date. This Act takes effect upon becoming law or on the date Senate Bill 3666 of the 103rd General Assembly takes effect, whichever is later.