House File 240 - Introduced HOUSE FILE 240 BY SHIPLEY A BILL FOR An Act providing for exemptions for virtual currency from 1 certain security and money transmission regulations. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1604HH (3) 88 gh/rn

H.F. 240 Section 1. Section 502.102, subsection 28, Code 2019, is 1 amended by adding the following new paragraph: 2 NEW PARAGRAPH . g. It does not include virtual currency. 3 Sec. 2. Section 502.102, Code 2019, is amended by adding the 4 following new subsection: 5 NEW SUBSECTION . 32. “Virtual currency” means the same as 6 defined in section 533C.102. 7 Sec. 3. Section 502.202, Code 2019, is amended by adding the 8 following new subsection: 9 NEW SUBSECTION . 25. Virtual currency transactions. A 10 transaction using virtual currency, in whole or in part. 11 Sec. 4. Section 502.401, subsection 2, Code 2019, is amended 12 by adding the following new paragraph: 13 NEW PARAGRAPH . c. A person that facilitates the exchange of 14 virtual currency or that uses virtual currency, in whole or in 15 part, to conduct a transaction. 16 Sec. 5. Section 533C.102, Code 2019, is amended by adding 17 the following new subsection: 18 NEW SUBSECTION . 28. “Virtual currency” means a digital 19 representation of value that can be digitally traded and 20 functions as a medium of exchange, a unit of account, or 21 a store of value but does not have legal tender status as 22 recognized by the United States government. 23 Sec. 6. Section 533C.103, Code 2019, is amended by adding 24 the following new subsection: 25 NEW SUBSECTION . 17. A person that facilitates the exchange 26 of virtual currency or that uses virtual currency, in whole or 27 in part, to conduct a transaction. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill exempts virtual currency from certain regulations 32 applicable to securities in Code chapter 502 and money 33 transmissions in Code chapter 533C. Code chapter 502, the 34 “Iowa Uniform Securities Act” or “Blue Sky Law”, provides 35 -1- LSB 1604HH (3) 88 gh/rn 1/ 2

H.F. 240 for the regulation of securities and includes registration 1 requirements for securities and broker-dealers, or persons 2 engaging in securities transactions in Iowa. Code chapter 3 533C, the “Uniform Money Services Act”, requires persons 4 engaging in the business of money transmission in Iowa to 5 obtain licensure from the Iowa superintendent of banking. 6 The bill defines “virtual currency” to mean a digital 7 representation of value that can be digitally traded and 8 functions as a medium of exchange, a unit of account, or 9 a store of value but does not have legal tender status as 10 recognized by the federal government. 11 The bill specifies that the term “security”, as used in 12 Code chapter 502, does not include virtual currency. The bill 13 exempts transactions involving virtual currency from security 14 registration and filing requirements in Code chapter 502. The 15 bill also exempts persons facilitating the exchange of virtual 16 currency or using virtual currency to conduct transactions from 17 broker-dealer registration requirements in Code chapter 502 and 18 money transmission licensure requirements in Code chapter 533C. 19 -2- LSB 1604HH (3) 88 gh/rn 2/ 2