![]() ![]() Therefore, the TVCA makes cryptocurrency safer for investors by legally recognizing virtual currency, subjecting cryptocurrency firms to commercial regulations, and by supplying token investors with legal rights to their investments. In conclusion, the TVCA: (1) recognizes the legal status of virtual currency, (2) regulates cryptocurrency under the commercial laws of Texas, and (3) provides cryptocurrency holders with legal rights. In applying property law, the former is akin to actual knowledge and the later is akin to constructive knowledge. Section 12 defines an adverse claim as “a claim that a claimant has a property interest in a virtual currency and that it is a violation of the rights of the claimant for another person to hold, transfer, or deal with the virtual currency.” There are two situations that indicate a purchaser has notice of an adverse claim: (1) the person knows of the adverse claim or (2) the person is aware of facts sufficient to indicate that there is a significant probability that the adverse claim exists and deliberately avoids information that would establish the existence of the adverse claim. A qualifying purchaser is defined as “a purchaser that obtains control of a virtual currency for value and without notice of any adverse claim.” These buyers are analogous to bona fide purchasers under Property law. Accordingly, it is possible for several different investors to have property rights in a single cryptocurrency.įurthermore, section 12 provides special rights to qualifying purchasers. 33 of Bitcoin, then they only have rights over 33% of a single Bitcoin. For example, if a purchaser buys 33% of a single bitcoin, or. If only a limited interest in a virtual currency is bought, then the buyer acquires rights to the extent of the interest purchased in cryptocurrency. Specifically, Section 12.003 states that virtual currency buyers acquire all rights in the virtual currency that the transferor had or had the power to transfer. ![]() Third, Section 12.003 supplies legal rights to cryptocurrency investors. By subjecting cryptocurrency firms to TSA liability, the Act incorporates cryptocurrency oversight into the general framework of Texas commercial law. Cryptocurrency firms that violate the TSA are subject to administrative, civil, and criminal sanctions for violations of Texas securities law. Generally, the TSA prohibits: (1) fraud in the offer or sale of securities, and (2) fraud in providing investment advice services. Specifically, the TSA applies to firms and individuals who sell securities or render investment advice in Texas. Accordingly, a cryptocurrency firm offering an ICO to the public must comply with the Texas Securities Act (TSA). Second, the Act requires cryptocurrency companies and investors to follow the existing commercial laws of Texas, such as the state’s Business & Commerce Code. The statutory definition of virtual currency does not include: (1) a transaction in which a merchant grants a value that cannot be exchanged with the merchant for legal tender, bank credit, or virtual currency as part of a rewards program nor (2) a digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform. Under HB 4774, virtual currency is defined as “a digital representation of value that is used as a medium of exchange, unit of account, or store of value” that is not legal tender. Under section 12 of the TVCA, the Act becomes effective on September 1, 2021.įirst, the Act legitimizes the legal status of cryptocurrency by providing it a legal definition. Overall, the law specifically addresses cryptocurrency by: (1) recognizing the legal status of virtual currency, (2) ensuring that cryptocurrencies are subject to commercial laws under Texas regulations, and (3) supplying legal rights to cryptocurrency holders. The short title of the bill is the “Texas Virtual Currency Bill” (TVCB). Specifically, the bill adds amendments to the state’s Business & Commerce Code to address virtual currency. On June 15, 2021, cryptocurrency-specific legislation was passed under the laws of Texas when Governor Abbott signed House Bill 4474 into law. HB 4774 – The Texas Virtual Currency Act (TVCA) Requires each state agency and local government would be required to consider using next-generation technologies, including cryptocurrency, blockchain technology, and artificial intelligence.Įstablishes the Texas blockchain working group. ![]() Relates to business entities includes a distributed electronic network or database employing blockchain or distributed ledger technology in definitions.Ĭreates programs and requirements for state agencies and local governments to assess cybersecurity risks. Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology Texas ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |