Illinois General Assembly - Full Text of SB2319

SB2319 Enrolled LRB104 09000 BAB 19056 b

AN ACT concerning regulation.

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

Section 1. Short title. This Act may be cited as the Digital Asset Kiosks Act.

Section 5. Purpose and construction. The purpose of this Act is to protect the People of Illinois against the fraud and scams in digital asset kiosk transactions by providing necessary registration requirements, disclosures, and other safeguards for customers. This Act shall be liberally construed to effectuate its purpose.

Section 10. Definitions. As used in this Act:

"Affiliate" means any person that controls, is controlled by, or is under common control with another person. As used in this paragraph, "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person.

"Applicant" means a person that applies for registration under this Act.

"Bank" means a bank, savings bank, savings-and-loan association, savings association, or industrial loan company chartered under the laws of this State or any other state or under the laws of the United States.

"Blockchain analytics" means the analysis of data from blockchains or public distributed ledgers, including associated transaction information.

"Blockchain analytics software" means a software service that uses blockchain analytics data to provide risk-specific information about digital asset wallet addresses, among other things.

"Charges" means: (i) fees or expenses paid by the customer; and (ii) the difference between the market price of the digital asset and the price of the digital asset charged to the customer.

"Confidential supervisory information" means information or documents obtained by employees, agents, or representatives of the Department in the course of any examination, investigation, audit, visit, registration, certification, review, licensing, or any other regulatory or supervisory activity pursuant to this Act, and any record prepared or obtained by the Department to the extent that the record summarizes or contains information derived from any report, document, or record described in this Act.

"Credit union" means a credit union chartered under the laws of this State or any other state or under the laws of the United States.

"Department" means the Department of Financial and Professional Regulation.

"Digital asset" means a digital representation of value that is used as a medium of exchange, unit of account, or store of value and that is not fiat currency, whether or not denominated in fiat currency. "Digital asset" does not include any of the following: (i) a digital representation of value which a merchant grants, as part of an affinity or rewards program, and that cannot be taken from or exchanged with the merchant for fiat currency or a digital asset; (ii) a digital representation of value that is issued by or on behalf of a game publisher, used solely within a gaming platform, has no market or application outside of such gaming platform, and cannot be converted into, or redeemed for, fiat currency or digital assets; or (iii) a digital representation of value that is used as part of prepaid cards.

"Digital asset exchange" means an exchange that facilitates the buying, selling, or exchanging of digital assets for fiat currency or other digital assets that is licensed to conduct business in New York as a Virtual Currency Business Activity licensee or in California under the Digital Financial Assets Law.

"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.

"Digital asset kiosk operator" means a registrant or a person required to register pursuant to this Act.

"Existing customer" means a person who transacts with the operator following the new customer period. For the avoidance of doubt, "existing customer" includes any customer that is not a new customer.

"Federally insured depository institution" shall mean an insured depository institution as defined by Section 3(c)(2) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(c)(2), as amended, or an insured credit union as defined by Section 101(7) of the Federal Credit Union Act, 12 U.S.C. 1752(7), as amended.

"Fiat currency" means a medium of exchange or unit of value issued by the United States or a foreign government and that is designated as legal tender in its country of issuance.

"Insolvent" means any of the following: (i) having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute, (ii) being unable to pay debts as they become due, and (iii) being insolvent within the meaning of federal bankruptcy law.

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

"New customer" means a person who has never previously transacted with the operator. The new customer shall remain defined as such during the earlier of: (i) the customer's first 3 transactions after opening an account with the operator, or (ii) 7 days after opening an account with the operator.

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

"Person" means, without limitation, any individual, corporation, business trust, estate, trust, partnership, proprietorship, syndicate, limited liability company, association, joint venture, government, governmental subsection, agency or instrumentality, public corporation or joint-stock company, or any other organization or legal or commercial entity.

"Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

"Registrant" means a person registered under this Act.

"Request for assistance" means all inquiries, complaints, account disputes, and requests for documentation a digital asset kiosk operator receives from residents.

"Responsible individual" means an individual who has direct control over, or significant management, policy, or decision-making authority with respect to, a person's digital asset kiosk business activity in this State.

"Secretary" means the Secretary of Financial and Professional Regulation and any authorized representative of the Secretary.

"Service provider" means any person that provides a material service to a digital asset kiosk operator in connection with the offering or provision by that operator of a digital asset business activity in this State, including a person that either (i) participates in designing, operating, or maintaining the digital asset business activity, or (ii) processes transactions relating to a digital asset kiosk transaction then unknowingly or incidentally transmitting or processing financial data in a manner that the data is undifferentiated from other types of data of the same form as the person transmits or processes.

"Tangible net worth" means the aggregate assets of a registrant, excluding all intangible assets, less liabilities, as determined in accordance with the United States' generally accepted accounting principles.

Section 15. General powers and duties.

(a) The Department shall have the following functions, powers, and duties, in carrying out its responsibilities under this Act:

(1) to issue or refuse to issue any registration or other authorization under this Act;

(2) to revoke or suspend for cause any registration or other authorization under this Act;

(3) to keep records of all registrations or other authorizations under this Act;

(4) to receive, consider, investigate, and act upon complaints made by any person relating to any digital asset kiosk in this State;

(5) to prescribe the forms of and receive:

(A) applications for registrations or other authorizations under this Act; and

(B) all reports and all books and records required to be made under this Act;

(6) to subpoena documents and witnesses and compel their attendance and production, to administer oaths, and to require the production of any books, papers, or other materials relevant to any inquiry authorized by this Act or other law applicable to digital asset business activity in this State;

(7) to issue orders against any person:

(A) if the Secretary has reasonable cause to believe that an unsafe, unsound, or unlawful practice has occurred, is occurring, or is about to occur;

(B) if any person has violated, is violating, or is about to violate any law, rule, or written agreement with the Secretary; or

(C) for the purpose of administering the provisions of this Act or other applicable law.

(8) to address any inquiries to any digital asset kiosk operator or the directors, officers, or employees of the digital asset kiosk operator, or the affiliates or service providers of the digital asset kiosk operator, in relation to the digital asset kiosk operator's activities and conditions or any other matter connected with its affairs, and it shall be the duty of any person so addressed to promptly reply in writing to those inquiries. The Secretary may also require reports from any digital asset kiosk operator at any time the Secretary chooses;

(9) to examine the books and records of every digital asset kiosk operator, affiliate, or service provider;

(10) to enforce the provisions of this Act.

(11) to levy fees, fines, and civil penalties, charges for services, and assessments to defray operating expenses, including direct and indirect costs, of administering this Act.

(12) to appoint examiners, supervisors, experts, and special assistants as needed to effectively and efficiently administer this Act.

(13) to conduct hearings for the purpose of carrying out the purposes of this Act;

(14) to exercise visitorial power over a digital asset kiosk operator, affiliate, or service provider;

(15) to enter into cooperative agreements with federal and State regulatory authorities and to accept reports of examinations from federal and State regulatory authorities;

(16) to impose civil penalties against a digital asset kiosk operator, affiliate, or service provider for failing to respond to a regulatory request or reporting requirement;

(17) to perform any other lawful acts necessary or desirable to carry out the purposes and provisions of this Act.

(b) The Department may share any information obtained pursuant to this Act with law enforcement officials or other regulatory agencies.

Section 20. Funds.

(a) All moneys collected or received by the Department under this Act shall be deposited into the Digital Asset Kiosk Fund. The amounts deposited into the Digital Asset Kiosk Fund shall be used for the ordinary and contingent expenses of the Department in administering this Act and other financial laws. Nothing in this Act shall prevent the continuation of the practice of paying expenses involving salaries, retirement, social security, and State-paid insurance of State officers and employees by appropriation from the General Revenue Fund or any other fund. Moneys deposited into the Digital Asset Kiosk Fund may be transferred to the Professions Indirect Cost Fund or any other Department fund.

(b) The expenses of administering this Act, including investigations and examinations provided for in this Act, shall be borne by and assessed against persons regulated by this Act. The Department may establish fees by rule, including in the following categories:

(1) investigation of registrants and registration applicant fees;

(2) examination fees;

(3) contingent fees; and

(4) such other categories as may be required to administer this Act.

(c) The Department shall charge and collect fees from digital asset kiosk operators, which shall be nonrefundable unless otherwise indicated, for the expenses of administering this Act as follows:

(1) Each digital asset kiosk operator shall pay $150 for each hour or part of an hour for each examiner or staff assigned to the supervision of the digital asset kiosk operator plus actual travel costs for any examination pursuant to the Act. Supervision of operators includes, but is not limited to, examination, audit, visit, registration, certification, review, investigation, or any other regulatory activity conducted pursuant to this Act.

(2) Each digital asset kiosk operator shall pay to the Department its pro rata share of the cost for administration of this Act that exceeds other fees listed in this Act, as estimated by the Department, for the current year and any deficit actually incurred in the administration of the Act in prior years. The total annual assessment for all registrants shall initially be divided into a transaction-based assessment. Each registrant's pro rata share shall be based on the percentage of the total United States dollar value of all digital asset kiosk transactions by all registrants in Illinois per calendar year.

(d) The Department may, by rule, amend any fees set forth in this Act. The Department may establish additional fees by rule as set forth in this Section.

Section 25. Daily transaction limit.

(a) A digital asset kiosk operator shall not accept or dispense more than $2,500 or equivalent monetary value in a day from or to the same new customer through a digital asset kiosk.

(b) A digital asset kiosk operator shall not accept or dispense more than $10,500 or the equivalent monetary value in a day from or to any existing customer through a digital asset kiosk.

Section 30. Customer charges limit. A digital asset kiosk 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) 18% of digital assets involved in the transaction according to the market price of the digital asset at the time the customer initiates the transaction.

Section 35. Customer disclosures.

(a) Before engaging in each digital asset kiosk transaction with a customer, a digital asset kiosk operator shall provide written disclosure, in English and in the same language principally used by the digital asset kiosk 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:

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

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

(3) 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.

(4) All procedures for providing refunds as required by Section 45 of this Act and other methods to reverse or refund a transaction offered by the digital asset kiosk operator.

(5) 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 except as otherwise set forth in this disclosure.".

(6) Digital assets are not legal tender, are not backed by the government, and accounts and value balances are not subject to Federal Deposit Insurance Corporation or Securities Investor Protection Corporation protections.

(7) Legislative and regulatory changes or actions at the State, federal, or international level may adversely affect the use, transfer, exchange, and value of digital assets.

(8) Some digital asset transactions shall be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that the customer initiates the transaction.

(9) The value of a digital asset may be derived from the continued willingness of market participants to exchange fiat currency for digital assets, which may result in the potential for permanent and total loss of value of a particular digital asset should the market for that digital asset disappear.

(10) There is no assurance that a person who accepts a digital asset as payment today will continue to do so in the future.

(11) The volatility and unpredictability of the price of a digital asset relative to fiat currency may result in significant loss over a short period of time.

(12) The nature of digital assets may lead to an increased risk of fraud or cyberattack.

(13) The nature of digital assets means that any technological difficulties experienced by the digital asset kiosk operator may prevent access or use of a customer's digital assets.

(14) Any bond or trust account maintained by the digital asset kiosk operator for the benefit of its customers may not be sufficient to cover all losses incurred by customers.

(b) The disclosures required by this Section shall be clear and conspicuous and provided separately from any other disclosure provided by the digital asset kiosk operator.

(c) A digital asset kiosk operator shall provide a customer with a receipt for any transaction made at the digital asset kiosk 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 digital asset kiosk operator.

(4) The amount of the digital assets and any digital asset addresses 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 digital asset kiosk 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) All procedures for providing refunds as required by this Act and any other methods to reverse or refund the transaction offered by the digital asset kiosk operator.

Section 40. Reporting physical addresses.

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

(b) A digital asset kiosk operator shall provide the Department with updates to the list required by subsection (a) of this Section within 30 days after 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 digital asset kiosk operator available to the public on the Department's website.

Section 41. Customer service. All digital asset kiosk operators performing business in this State must provide live customer service during kiosk operating hours. The customer service toll-free number must be displayed on the digital asset kiosk or on the digital asset kiosk screen.

Section 42. Prevention of fraudulent activity. All digital asset kiosk operators must take reasonable steps to detect and prevent fraud, including establishing and maintaining a written anti-fraud policy.

Section 43. Blockchain analytics. All digital asset kiosk operators must use blockchain analytics software to help prevent transactions to wallets known to be affiliated with fraudulent activity at the time of a transaction and to detect transaction patterns indicative of fraud or other illicit activities.

Section 44. Law enforcement access to investigative information. All digital asset kiosk operators performing business in this State must provide a dedicated communications line for relevant government agencies through a posted U.S. phone number or email address. This dedicated line shall facilitate law enforcement and regulatory agency communications with the digital asset kiosk operator in the event of a fraud report from a customer. The communications line must be frequently monitored.

Section 45. Refunds.

(a) A digital asset kiosk operator must issue a refund to a new customer for the full amount for up to 3 fraudulent transactions made within the new customer period, upon request of the customer. To receive a refund under this subsection, a new customer must:

(1) have been fraudulently induced to engage in a transaction or transactions involving the digital asset kiosk;

(2) within 30 days after the last transaction to occur during the new customer period, contact the digital asset kiosk operator to inform them of the fraudulent nature of the transaction or transactions at issue; and

(3) within 60 days after the last transaction to occur during the new customer period, submit a police report or government agency report of the transaction or transactions to the digital asset kiosk operator.

(b) A digital asset kiosk operator must issue a refund to an existing customer for the full amount of all charges upon request of an existing customer. To receive a refund under this subsection, an existing customer must:

(1) have been fraudulently induced to engage in a transaction or transactions involving the digital asset kiosk;

(2) within 30 days after the transaction or transactions at issue, contact the digital asset kiosk operator to inform them of the fraudulent nature of the transaction or transactions at issue; and

(3) within 60 days after the transaction or transactions at issue, submit a police report or government agency report of the transaction or transactions to the digital asset kiosk operator.

Section 50. Registration required.

(a) A person shall not operate a digital asset kiosk in this State unless the person is registered with the Department pursuant to this Act or exempt from this Act.

(b) A person with any operational digital asset kiosks in this State as of the effective date of this Act shall not be required to be registered with the Department until July 1, 2027.

Section 55. Applications.

(a) An application for a registration under this Act shall meet all of the following requirements:

(1) The application shall be in a form and medium prescribed by the Department.

(2) The application shall provide all of the following information:

(A) The name of the applicant and the address of the principal place of business of the applicant and the address of all locations and proposed locations of the applicant in this State.

(B) The form of business organization of the applicant, including:

(i) a copy of its articles of incorporation and amendments thereto and a certified copy of its bylaws, if the applicant is a corporation;

(ii) a copy of its partnership agreement, certified by a partner, if the applicant is a partnership; or;

(iii) a copy of the documents that control its organizational structure, certified by a managing official, if the applicant is organized in some other form.

(C) The name, the business and home address, and a chronological summary of the business experience, material litigation history, and felony convictions over the preceding 10 years of:

(i) the proprietor, if the applicant is an individual;

(ii) every partner, if the applicant is a partnership;

(iii) each officer, director, and controlling, person, if the applicant is a corporation; and

(iv) each person in a position to exercise control over, or direction of, the business of the applicant, regardless of the form of organization of the applicant.

(D) Financial statements, not more than one year old, prepared in accordance with generally accepted accounting principles and audited by a licensed public accountant or certified public accountant showing the financial condition of the applicant and an unaudited balance sheet and statement of operation as of the most recent quarterly report before the date of the application, certified by the applicant or an officer or partner thereof. If the applicant is a wholly owned subsidiary or is eligible to file consolidated federal income tax returns with its parent, however, unaudited financial statements for the preceding year along with the unaudited financial statements for the most recent quarter may be submitted if accompanied by the audited financial statements of the parent company for the preceding year along with the unaudited financial statement for the most recent quarter.

(E) Filings of the applicant with the Securities and Exchange Commission or similar foreign governmental entity (English translation), if any.

(F) A list of all other states in which the applicant is licensed, registered, or the equivalent and whether the license, registration, or equivalent of the applicant for those purposes has ever been withdrawn, refused, canceled, or suspended in any other state, with full details.

(G) A sample of any contracts, disclosures, or terms of service applicable to its digital asset kiosk operations.

(H) The name and business address of any digital asset exchange or other person through which the applicant intends to conduct any business regulated under this Act.

(I) A surety bond as required by Section 70 of this Act.

(J) A written statement that the applicant is in full compliance with and agrees to continue to fully comply with all State and federal statutes and regulations relating to money laundering.

(K) All additional information the Secretary considers necessary in order to determine whether to issue the applicant a license under this Act.

(b) The application shall be accompanied by a nonrefundable fee of $5,000 to cover the costs of application review.

(c) With good cause, the Secretary may waive, in part, any of the requirements of this Section.

Section 60. Refusal to issue registration.

(a) The Secretary may refuse to issue or a registration if: (i) the application does not comply with this Act; (ii) the proposed business operations do not comply with this Act; (iii) the competence, experience, and integrity of the officers, directors, controlling persons, and proposed management personnel, if the applicant is a corporation, or the competence, experience, and integrity of the owners, partners, and proposed management personnel, if the applicant is a partnership or other entity however organized, indicate that it is not in the interest of the public to permit the applicant to be registered under this Act; or (iv) registration is otherwise not in the best interest of the public.

(b) The Secretary shall issue a formal written notice of the denial of a license application within 30 days after the decision to deny the application. The Secretary shall set forth the specific reasons for the denial of the application in the notice of denial and serve the applicant, either personally or by certified mail. Service by certified mail shall be deemed completed when the notice is deposited into the U.S. Mail. An applicant whose application is denied by the Secretary under this Section may submit a written request for a hearing that shall include the particular reasons why the applicant believes that the decision to deny the application was incorrect, within 10 days after service of the notice of the denial. If an applicant submits a timely request for a hearing, the Secretary shall schedule a hearing after the request for a hearing unless otherwise agreed to by the parties. The Secretary shall conduct hearings pursuant to this Section and in accordance with 38 Ill. Adm. Code 100, as amended or recodified.

Section 65. Renewal.

(a) A registration under this Act shall be renewed annually.

(b) A registrant shall submit a renewal report, in a form and in a medium prescribed by the Secretary by December 1 of each year. The form requires any information deemed necessary by the Secretary to review a renewal application. At a minimum, the renewal report must state or contain a description of each material change in information submitted by the registration in its original registration application or in its business operations which has not been reported to the Secretary.

(c) The Secretary may grant an extension of the renewal date.

Section 70. Surety bond.

(a) An applicant for a registration must provide, and a registrant at all times must maintain, security consisting of a surety bond in a form satisfactory to the Secretary. The bond shall run to the State of Illinois for the benefit of any claimant against the applicant or registrant with respect to any operations regulated by this Act. A claimant damaged by a breach of the conditions of a bond shall have a right to action upon the bond for damages suffered thereby and may bring suit directly on the bond, or the Secretary may bring suit on behalf of the claimant.

(b) The amount of the required security bond shall be the greater of $100,000 or an amount equal to 100% of the monthly dollar value of all digital asset kiosk transactions in this State calculated for the most recently completed quarter, up to a maximum of $2,000,000.

Section 75. Tangible net worth.

(a) A registrant under this Act shall maintain at all times a tangible net worth of the greater of $100,000 or 3% of total assets for the first $100,000,000, 2% of additional assets for $100,000,000 to $1,000,000,000, and 0.5% of additional assets for over $1,000,000,000.

(b) Notwithstanding subsection (a), the Secretary shall have discretionary authority to exempt, in part or in whole, from the requirements of this Section any applicant or registrant.

Section 85. Enforcement generally.

(a) Upon written notice to a digital asset kiosk operator, the Secretary may suspend or revoke any registration issued pursuant to this Act if, in the notice, the Secretary makes a finding of one or more of the following:

(1) that any fact or condition exists that, if it had existed at the time of the original application for the registration, would have warranted the Secretary in refusing originally to issue the registration; or

(2) that if a registrant is other than an individual, any ultimate equitable owner, officer, director, or member of the registration partnership, association, corporation, or other entity has acted or failed to act in a way that would be cause for suspending or revoking a registration to that party as an individual; and

(3) any ground set forth in subsection (l).

(b) No registration shall be suspended or revoked, except as provided in this Section, nor shall any digital asset kiosk operator be fined without notice of the right to a hearing as provided in this Section.

(c) The Secretary, on good cause shown that an emergency exists, may suspend any registration for a period not exceeding 180 days, pending investigation.

(d) No revocation, suspension, or surrender of any registration shall impair or affect the obligation of any preexisting lawful contract between the registrant and any person.

(e) Every registration issued under this Act shall remain in force and effect until the registration expires without renewal, is surrendered, is revoked, or is suspended in accordance with the provisions of this Act, but the Secretary shall have authority to reinstate a suspended registration or to issue a new registration to a digital asset kiosk operator whose registration has been revoked if no fact or condition then exists which would have warranted the Secretary in refusing originally to issue that registration under this Act.

(f) Whenever the Secretary revokes or suspends a registration issued pursuant to this Act or fines a digital asset kiosk operator under this Act, the Secretary shall execute a written order to that effect. The Secretary shall serve a copy of the order upon the digital asset kiosk operator.

(g) If the Secretary finds any digital asset kiosk operator in violation of the grounds set forth in subsection (l), the Secretary may enter an order imposing one or more of the following penalties:

(1) revocation of registration;

(2) suspension of a registration subject to reinstatement upon satisfying all reasonable conditions the Secretary may specify;

(3) placement of the digital asset kiosk operator or applicant on probation for a period of time and subject to all reasonable conditions as the Secretary may specify;

(4) issuance of a reprimand;

(5) imposition of a fine not to exceed $25,000 for each count of separate offense; except that a fine may be imposed that shall not exceed $75,000 for each separate count of offense in violation of paragraph (2) or (14) of subsection (l);

(6) denial of a registration application; or

(7) restitution for the benefit of any person.

(h) The Secretary may issue a new registration to a digital asset kiosk operator whose registration has been revoked when facts or conditions which clearly would have warranted the Secretary in refusing originally to issue the registration no longer exist.

(i) For every order issued pursuant to this Section, the Secretary shall serve the digital asset kiosk operator with notice of the Secretary's action, including a statement of the reasons for the actions, either personally or by certified mail. Service by certified mail shall be deemed completed when the notice is deposited in the U.S. mail.

(j) Any order issued pursuant to this Section shall take effect upon service of the order unless the digital asset kiosk operator requests a hearing, in writing, within 10 days after the date of service. If a hearing is requested, the order shall be stayed until a final administrative order is entered except for an emergency revocation and suspension as set forth subsection (c).

(1) If the digital asset kiosk operator requests a hearing, the Secretary shall schedule a hearing within 90 days after the request for a hearing unless otherwise agreed to by the parties.

(2) The hearing shall be held at the time and place designated by the Secretary. The Secretary and any administrative law judge designated by the Secretary shall have the power to administer oaths and affirmations, subpoena witnesses and compel their attendance, take evidence, and require the production of books, papers, correspondence, and other records or information that the Secretary or the Secretary's designated administrative law judge considers relevant or material to the inquiry.

(k) The costs of administrative hearings conducted pursuant to this Section shall be paid by the digital asset kiosk operator.

(l) The following acts shall constitute grounds for which the disciplinary actions specified in subsection (g) may be taken:

(1) being convicted or found guilty, regardless of pendency of an appeal, of a crime in any jurisdiction that involves fraud, dishonest dealing, or any other act of moral turpitude;

(2) fraud, misrepresentation, deceit, or negligence in any relation to any transaction regulated under this Act;

(3) a material or intentional misstatement of fact on an initial or renewal application;

(3.5) any fact or condition exists that, if it had existed at the time of the original application for the registration, would have warranted the Secretary in refusing to originally issue the registration;

(4) insolvency or filing under any provision of the United States Bankruptcy Code as a debtor;

(5) failure to account or deliver to any person any property, such as any money, fund, deposit, check, draft, or other document or thing of value, that has come into a digital asset kiosk operator's hands and that is not the digital asset kiosk operator's property or that the digital asset kiosk operator is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law, or, in the absence of a fixed time, upon demand of the person entitled to the accounting and delivery;

(6) failure to disburse funds in accordance with agreements;

(7) having a registration, or the equivalent, to practice any profession or occupation or operate any business revoked, suspended, or otherwise acted against, including the denial of licensure by a licensing authority of this State or another State, territory, or country, for fraud, dishonest dealing, or any other act of moral turpitude;

(8) failure to comply with an order of the Secretary;

(9) engaging in activities regulated by this Act without a current, active registration unless specifically exempted by this Act;

(10) failure to pay in a timely manner any fee, charge, or fine under this Act;

(11) failure to maintain, preserve, and keep available for examination all books, accounts, or other documents required by the provisions of this Act;

(12) refusing, obstructing, evading, or unreasonably delaying an investigation, information request, or examination authorized under this Act, or refusing, obstructing, evading, or unreasonably delaying compliance with the Secretary's subpoena or subpoena duces tecum;

(13) failure to comply with or a violation of any provision of this Act; and

(14) any unfair, deceptive, or abusive business practice.

Section 90. Cease and desist order.

(a) The Secretary may issue a cease and desist order to any digital asset kiosk operator doing business without the required registration, when in the opinion of the Secretary the digital asset kiosk operator is violating or is about to violate any provision of this Act or requirement imposed in writing by the Department as a condition of granting any authorization permitted by this Act. The cease and desist order permitted by this Section may be issued before a hearing.

(b) The Secretary shall serve notice of the Secretary's action, including, but not limited to, a statement of the reasons for the action, either personally or by certified mail. Service by certified mail shall be deemed completed when the notice is deposited in the U.S. Mail.

(c) Within 10 days after service of the cease and desist order, the digital asset kiosk operator may request a hearing in writing. The Secretary shall schedule a hearing within 90 days after the request for a hearing unless otherwise agreed to by the parties.

(d) If it is determined that the Secretary had the authority to issue the cease and desist order, the Secretary may issue such orders as may be reasonably necessary to correct, eliminate, or remedy the conduct.

(e) The powers vested in the Secretary by this Section are in addition to any and all other powers and remedies vested in the Secretary by law, and nothing in this Section shall be construed as requiring that the Secretary shall employ the power conferred in this subsection instead of or as a condition precedent to the exercise of any other power or remedy vested in the Secretary.

Section 95. Civil action. A claim of violation of Sections 25, 30, and 45 of this Act may be asserted in a civil action. Additionally, a prevailing resident may be awarded reasonable attorney's fees and court costs.

Section 100. Rulemaking.

(a) The Department may adopt rules to implement the provisions of this Act, including, but not limited to:

(1) rules in connection with the activities of digital asset kiosk operators as may be necessary and appropriate for the protection of persons in this State;

(2) rules as may be necessary and appropriate to define improper or fraudulent business practices in connection with the activities of digital asset kiosk operators and digital asset kiosks;

(3) rules that define the terms used in this Act and as may be necessary and appropriate to interpret and implement the provisions of this Act; and

(4) rules as may be necessary for the implementation, enforcement and administration of this Act.

(b) The Secretary is hereby authorized and empowered to make specific rulings, demands, and findings that the Secretary deems necessary for the proper conduct of operators.

Section 105. Appeal and review.

(a) The Department may, in accordance with the Illinois Administrative Procedure Act, adopt rules to provide for review within the Department of the Secretary's decisions affecting the rights of persons under this Act. The review shall provide for, at a minimum:

(1) appointment of a hearing officer;

(2) appropriate procedural rules, specific deadlines for filings, and standards of evidence and of proof; and

(3) provision for apportioning costs among parties to the appeal.

(b) All final agency determinations of appeals to decisions of the Secretary may be reviewed in accordance with and under the provisions of the Administrative Review Law. Appeals from all final orders and judgments entered by a court in review of any final administrative decision of the Secretary or of any final agency review of a decision of the Secretary may be taken as in other civil cases.

(c) The Secretary shall conduct hearings pursuant to this Section and in accordance with 38 Ill. Adm. Code 100, as amended or recodified from time to time.

Section 110. Evasion. An agreement, contract, or transaction that is structured to evade the scope of this Act shall be deemed to fall within the scope of this Act.

Section 115. Injunction. The Secretary may, through the Attorney General, maintain an action in the name of the people of the State of Illinois and may apply for an injunction in the Circuit Court to enjoin a person from violating this Act.

Section 120. Applicability. This Act governs any digital asset kiosk located in this State.

Section 125. Exemptions.

(a) This Act does not apply to the following persons:

(1) The United States; other states or political subdivisions of another state; agencies or instrumentalities of the federal government, another state, or local government; or a foreign government or a subdivision, department, agency, or instrumentality of a foreign government.

(2) A federally insured depository institution.

(3) A credit union with member share accounts insured by an insurer approved by the credit union's primary financial regulatory agency. An out-of-State credit union may not conduct any activity in this State that is not authorized for a credit union chartered under the laws of this State.

(b) Nothing in this Act grants persons described in this subsection (a) the authority to engage in any activity not otherwise granted under existing law.

(c) Notwithstanding any other provision of this Act, the Department, by rule or order, may conditionally or unconditionally exempt any person, or any class of person or classes of persons, digital asset, or transaction from any provision of this Act or any rule adopted pursuant to this Act, to the extent that the exemption is necessary or appropriate, in the public interest, and consistent with the protection of residents.

Section 800. If and only if Senate Bill 1797 of the 104th General Assembly, as amended by House Amendment No. 1, becomes law, then Sections 15, 20, 50, 55, 60, 65, 70, 75, 85, 90, 105, 115, 120, and 125 of this Act are repealed on the date that Senate Bill 1797 of the 104th General Assembly becomes law.

Section 900. The State Finance Act is amended by adding Section 5.1030 as follows:

(30 ILCS 105/5.1030 new)

Sec. 5.1030. The Digital Asset Kiosk Fund. If and only if Senate Bill 1797 of the 104th General Assembly, as amended by House Amendment No. 1, becomes law, this Section is repealed.

Section 997. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 999. Effective date. This Act takes effect upon becoming law.