Louisiana OFI Publishes Virtual Currency Business Activity Rule

The VCBA, which was passed during the 2020 Louisiana Legislative Session, requires the licensure of entities that engage in virtual currency business activities in the State of Louisiana, as defined in LSA-RS 6:1382 (22). In accordance with Section 1394 of the VC Act, which required the promulgation of a Rule in order to implement and enforce the provisions contained therein, a Rule was published in the October 20, 2022, Edition of the Louisiana Register, in accordance with the Louisiana Administrative Procedure Act. A Declaration of Emergency amending the Rule was also adopted on October 20, 2022, and was published in the November 20, 2022, Edition of the Louisiana Register, with an effective date of July 1, 2023. Pursuant to a Rule that was published in its final form in the February 20, 2023, Edition of the Louisiana Register, we began accepting initial applications for licensure through the Nationwide Multi-State Licensing System & Registry (NMLS) on January 1, 2023. After July 1, 2023, persons are no longer able to engage in VC business activities in the State of Louisiana without a license. Failure to file an application, will result in enforcement measures being taken by the Office pursuant the VC Act, and consideration of possible civil penalties pursuant to the Rule. On June 13, 2023, Senate Bill 185, Acts 331, was enacted — providing a clear and concise regulatory structure intended to ensure compliance with the provisions of the VCBA, as enacted by Acts 341 of the 2020 Regular Session of the Louisiana Legislature. (17) Person means an individual, general partnership, limited partnership, limited liability company, corporation, trust, association, joint stock corporation, or other legal entity, or any individual or group of individuals, however organized. The term shall not include a public corporation, government, or governmental subdivision, agency, or instrumentality. (27)(a) Virtual currency 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 legal tender, whether or not denominated in legal tender. (b) Virtual currency shall not include either of the following: (i) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank credit, or virtual currency. (ii) 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. (29) Virtual currency business activity means any of the following: (a) Exchanging, transferring, or storing virtual currency or engaging in virtual currency administration, whether directly or through an agreement with a virtual currency control services vendor. (b) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals. (c) Exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games for either of the following: (i) Virtual currency offered by or on behalf of the same publisher from which the original digital representation of value was received. (ii) Legal tender or bank credit outside of the online game, game platform, or family of games offered by or on behalf of the same publisher from which the original digital representation of value was received. (d) Virtual currency business activity shall not include any of the following: (i) Mining. (ii) Minting non-fungible tokens. (iii) Blockchain activities that do not involve any exchange, holding, sale, storing, or transfer of virtual currency to, for, or on behalf of any resident. (31) Virtual currency kiosk means an electronic terminal acting as a mechanical agent of the owner or operator