Today's Law As Amended


Bill PDF |Add To My Favorites | print page

AB-1336 Nonfungible token marketplaces.(2023-2024)



As Amends the Law Today


SECTION 1.

 Chapter 6.8 (commencing with Section 20655) is added to Division 8 of the Business and Professions Code, to read:

CHAPTER  6.8. Nonfungible Token Marketplaces
20655.
 As used in this chapter:
(a) “Information security program” means the administrative, technical, or physical safeguards a nonfungible token marketplace uses to access, collect, distribute, process, protect, store, use, transmit, dispose of, or otherwise handle resident information.
(b) “Nonfungible token” means a unique digital identifier that is recorded on a blockchain that serves as a digital record of ownership, which may provide the holder a right with respect to a digital item that is separate from the unique digital identifier.
(c) “Nonfungible token marketplace” means an internet website or online platform that can be used for individuals to buy or sell, or to connect with one another to arrange for the buying or selling of, nonfungible tokens.
(d) “Personal information” has the same meaning as defined in Section 1798.140 of the Civil Code.
(e) “Resident” means any of the following:
(1) A person who is domiciled in this state.
(2) A person who is physically located in this state for more than 183 days of the previous 365 days.
(3) A person who is physically located in the state while using the nonfungible token marketplace and has a place of business in this state.
(4) A legal representative of a person that is domiciled in this state.
(f) “Resident information” means personal information of a resident engaging with a nonfungible token marketplace that is maintained by, or on behalf of, a nonfungible token marketplace or its affiliates.
20656.
 (a) A nonfungible token marketplace shall disclose the terms and conditions of a nonfungible token marketplace at the time a resident contracts with the nonfungible token marketplace.
(b) The disclosure required by this section shall not contain material misrepresentations, shall be written in a manner that is understandable to a reasonable resident who uses the relevant services, and shall include all of the following:
(1) The manner by which fees and charges imposed by the nonfungible token marketplace will be calculated if they are not identified and disclosed in advance of a transaction and the timing of the fees and charges.
(2) If applicable, a disclosure that states that transfers of nonfungible tokens may be irrevocable.
(3) How liability for an unauthorized, mistaken, or accidental transfer of nonfungible tokens shall be apportioned.
(4) That nonfungible tokens may be subject to cybertheft and become unrecoverable.
(5) Whether the nonfungible token marketplace custodies any cryptocurrency or nonfungible tokens on behalf of the resident, or if the resident self-custodies.
(6) That a nonfungible token may be subject to tax in certain jurisdictions, and it is the responsibility of the buyer or seller of the nonfungible token to collect and remit that tax, if applicable.
20657.
 (a) If a nonfungible token marketplace charges and collects a fee, the nonfungible token marketplace shall disclose the amount of the fee to the resident that bears the fee before the resident’s approval of the transaction that would trigger the fee.
(b) (1) If a nonfungible token marketplace charges a fee on behalf of a third party in connection with a resident’s transaction, the nonfungible token marketplace shall disclose to the resident that bears the fee, before the resident’s approval of the transaction, the amount of the fee.
(2) If the amount of the fee to be charged on behalf of the third party may vary between approval and execution of the transaction, the nonfungible token marketplace shall provide the resident that bears the fee, before the resident’s approval of the transaction, with an estimate of the third party’s fee or a disclosure that the fee is not estimable or may change.
20658.
 A nonfungible token marketplace shall develop, implement, and maintain a comprehensive information security program tailored to the sensitivity of any resident information at issue.
20659.
 A nonfungible token marketplace shall maintain a dedicated contact channel to receive legal process from law enforcement.
20660.
 This chapter shall not be construed to create a private right of action under any other law.