With the crypto industry’s dramatic loss of market capitalization in recent weeks, some of the shimmer and gravitational attraction has shaken off digital assets. Consequently, some of the impetus behind legislative efforts related to digital assets and technology may have been lost this year. But digital assets and the blockchain technology on which they reside are likely to continue to interest investors and consumers and to play an important, albeit sometimes disruptive, role in modern economies.
Therefore, state legislatures remain likely to pass several crypto-related bills that vary widely in their subject matter and scope, including proposals that clarify existing regulation, create new regulatory frameworks, and dedicate state resources to support or study the impact and use of digital assets. This month the National Conference of State Legislatures surveyed legislation pending in each of the U.S. states and territories. See Heather Morton (June 6, 2022), Cryptocurrency 2022 Legislation, NCLS.ORG. This post synthesizes and summarizes the content of that publication, with a focus on identifying general trends in the subject matter of the pending bills.
Despite significant legislative interest in crypto, not all states have bills pending this year. The legislatures of Nevada, North Dakota, and Texas are at rest during this fiscal year, with no regular sessions scheduled. Others had no digital assets legislation introduced. At the time of the NCLS report, the following states and territories had not introduced digital assets legislation in 2022: Arkansas, Delaware, D.C., Puerto Rico, Guam, Maine, Maryland, Texas, Nevada, U.S. Virgin Islands, Wisconsin, and South Dakota.
New York, Hawaii, and Arizona are among the jurisdictions with the most bills pending related to crypto and digital assets. Filed bills in New York include one that would create a moratorium on cryptocurrency mining centers. Another would create new criminal offenses, including for token fraud, rug pulls, private key fraud, and fraudulent failure to disclose interests in virtual tokens. New York would also require certain disclosures in advertisements involving virtual tokens. California also has significant, substantive legislation pending.
Pending Legislative Proposals
Below is a list the subject matter addressed by the most common bills pending and the states in which they have been proposed. These proposals would:
(1) Allow or prohibit some or all political subdivisions or agencies to pay employees and others in virtual currency, to accept payment in virtual currency, or to use virtual currency as collateral in state financings.