Financial Code - FIN - FIN § 3103

Summary

(a) Except as otherwise provided in subdivision (b), this division governs the digital financial asset business activity of a person doing business in this state or, wherever located, who engages in or holds itself out as engaging in the activity with, or on behalf of, a resident

Text

(a)
Except as otherwise provided in subdivision (b), this division governs the digital financial asset business activity of a person doing business in this state or, wherever located, who engages in or holds itself out as engaging in the activity with, or on behalf of, a resident.
(b)
This division does not apply to activity by any of the following:
(1)
The United States, a state, political subdivision of a state, agency, or instrumentality of federal, state, or local government, or a foreign government or a subdivision, department, agency, or instrumentality of a foreign government.
(2)
A bank that is one of the following:
(A)
A commercial bank or industrial bank, the deposits of which are insured by the Federal Deposit Insurance Corporation or its successor.
(B)
A foreign (other nation) bank that is licensed under Chapter 20 (commencing with Section 1750) of Division 1.1 or that is authorized under federal law to maintain a federal agency or federal branch office in this state.
(C)
An association or federal association, as defined in Section 5102, the deposits of which are insured by the Federal Deposit Insurance Corporation or its successor.
(3)
A trust company licensed
pursuant to Section 1042 or a national association authorized under federal law to engage in a trust banking business.
(4)
A federally chartered or state-chartered credit union, with an office in California, the member accounts of which are insured or guaranteed as provided in Section 14858.
(5)
A person whose participation in a payment system is limited to providing processing, clearing, or performing settlement services solely for transactions between or among persons that are exempt from the licensing requirements of this division.
(6)
A person engaged in the business of dealing in foreign exchange to the extent the person’s activity meets the definition in Section 1010.605(f)(1)(iv) of Title 31 of the Code of Federal Regulations.
(7)
A person that is any of the following:
(A)
A person that contributes only connectivity software or computing power to securing a network that records digital financial asset transactions or to a protocol governing transfer of the digital representation of value.
(B)
A person that provides only data storage or security services for a business engaged in digital financial asset business activity and does not otherwise engage in digital financial asset business activity on behalf of another person.
(C)
A person that provides only to a person otherwise exempt from this division a digital financial asset as one or more enterprise solutions used solely among each
other and that does not have an agreement or a relationship with a resident that is an end user of a digital financial asset.
(8)
A person using a digital financial asset, including creating, investing, buying or selling, or obtaining a digital financial asset as payment for the purchase or sale of goods or services, solely on the person’s own behalf for personal, family, or household purposes or for academic purposes.
(9)
A person whose digital financial asset business activity with, or on behalf of, residents is reasonably expected to be valued, in the aggregate, on an annual basis at fifty thousand dollars ($50,000) or less, measured by the United States dollar equivalent of digital financial assets.
(10)
An
attorney to the extent of providing escrow services to a resident.
(11)
A title insurance company to the extent of providing escrow services to a resident.
(12)
A secured creditor under Division 9 (commencing with Section 9101) of the Commercial Code or a creditor with a judicial lien, or lien arising by operation of law, on collateral that is a digital financial asset, if the digital financial asset business activity of the creditor is limited to enforcement of the security interest in compliance with Division 9 (commencing with Section 9101) of the Commercial Code or lien in compliance with the law applicable to the lien.
(13)
A person that does not receive compensation, either directly or indirectly, for
providing digital financial asset products or services or for conducting digital financial asset business activity or that is engaged in testing products or services with the person’s own funds.
(14)
Any entity or futures commission merchant, swap dealer, or introducing broker registered under the federal Commodity Exchange Act (7 U.S.C. Sec. 1, et seq.)
to the extent those activities are conducted under authority of that act, are actually regulated by the Commodity Futures Trading Commission, and are entitled to preemption.
(15)
A person registered as a securities broker-dealer under federal or state securities laws to the extent of its operation as a broker-dealer.
(16)
A person that provides clearance or settlement services pursuant to a registration as a clearing agency or an exemption from registration granted under the federal securities laws to the extent of its operation as such a provider.
(17)
A merchant that accepts a digital financial asset as payment for the purchase or
sale of goods or services, which does not include digital financial assets.
(c)
(1)
The commissioner may, by regulation or order, either unconditionally or upon specified terms and conditions or for specified periods, exempt from all or part of this division any person or transaction, or class of persons or transactions, if the commissioner finds such action to be in the public interest and that the regulation of such persons or transactions is not necessary for the purposes of this division.
(2)
The commissioner shall post on the commissioner’s internet website a list of all persons, transactions, or classes of person or transactions exempt pursuant to this section, and the part or parts of this division from which they are exempt.
(3)
The commissioner may, by regulation or order, amend or rescind any exemption made pursuant to this subdivision.

Retrieval chunks

• #1 | Financial Code - FIN - FIN § 3103

  (a) Except as otherwise provided in subdivision (b), this division governs the digital financial asset business activity of a person doing business in this state or, wherever located, who engages in or holds itself out as engaging in the activity with, or on behalf of, a resident. (b) This division does not apply t…

• #2

  A person that provides only to a person otherwise exempt from this division a digital financial asset as one or more enterprise solutions used solely among each other and that does not have an agreement or a relationship with a resident that is an end user of a digital financial asset. (8) A person using a digital …

• #3

  A person that provides clearance or settlement services pursuant to a registration as a clearing agency or an exemption from registration granted under the federal securities laws to the extent of its operation as such a provider. (17) A merchant that accepts a digital financial asset as payment for the purchase or …