HB 5496 - Uniform Regulation of Virtual-Currency Businesses

• Establishes comprehensive licensing and registration requirements for businesses engaging in virtual-currency activities (exchanging, transferring, storing virtual currency) with Connecticut residents, effective October 1, 2018.

• Requires businesses to obtain a license from the Banking Commissioner or register if annual virtual-currency activity is $35,000 or less; provides exemptions for banks, money transmitters already licensed, securities intermediaries, and certain other entities.

• Mandates licensees and registrants maintain minimum net worth of $25,000, post security deposits/surety bonds, maintain five-year transaction records, and implement policies for anti-fraud, anti-money laundering, information security, and business continuity.

• Requires disclosure to residents of fees, insurance coverage, transaction irrevocability, error resolution rights, and that virtual currency is not legal tender; establishes protections requiring licensees to maintain sufficient virtual currency reserves for customer entitlements.

• Grants the Banking Commissioner enforcement authority including license suspension/revocation, cease-and-desist orders, civil penalties up to $50,000 per day for unlicensed operators and $10,000 per day for licensee violations, and the ability to appoint receivers for customer protection.