As used in this subchapter:

(1) “Control” means the power to execute unilaterally, or prevent indefinitely, a virtual currency transaction.

(2) “Control of virtual currency,” when used in reference to a transaction or relationship involving virtual currency, means the power to execute unilaterally or prevent indefinitely a virtual currency transaction. Control does not mean a person who retains the ability to terminate, suspend, or interrupt a virtual-currency transaction or similar action to prevent an unauthorized or fraudulent activity.

(3) “Exchange,” used as a verb, means to assume control of virtual currency from or on behalf of a person, at least momentarily, to sell, trade, or convert any of the following:

a. Virtual currency for money, bank credit, or 1 or more forms of virtual currency.

b. Money or bank credit for 1 or more forms of virtual currency.

(4) “Transfer” means to assume control of virtual currency from or on behalf of a person and to do any of the following:

a. Credit the virtual currency to the account of another person.

b. Move the virtual currency from 1 account of a person to another account of the same person.

c. Relinquish control of virtual currency to another person.

(5) “U.S. dollar equivalent of virtual currency” means the equivalent value of a particular virtual currency in United States dollars shown on a virtual-currency exchange based in the United States for a particular date or period specified in this subchapter.

(6) a. “Virtual currency” means a digital representation of value that is all of the following:

1. Used as a medium of exchange, unit of account, or store of value.

2. Is not money, whether or not denominated in money.

b. “Virtual currency” does not include any of the following:

1. 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 money or bank credit and that primarily relates to such affinity or rewards program.

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.

3. A digital representation of value that has value, utility, or significance beyond its mere existence as a digital asset, and that is not traded in such a manner or form that it should be considered a virtual currency, such as a mass-minted series of items with substantially similar or nearly identical traits that are marketed or sold interchangeably and that are primarily speculative in nature, including the digital equivalent of a tangible or intangible good such as any of the following:

A. A work of art, a musical composition, a literary work, or other intellectual property.

B. Collectibles, merchandise, virtual land, and in-game or in-application assets.

C. Affinity, rewards, or loyalty points, including airline miles or credit card points.

D. Rights, licenses, and tickets.

E. Any other digital representation of value that the Commissioner, by rule or regulation, determines has value, utility, or significance beyond its mere existence as a digital representation of value, including the digital equivalent of a tangible or intangible good.

The Commissioner, by rule or regulation, may determine whether such a digital representation of value under this paragraph (6)b.3. is traded in such a manner or form that it should be considered a virtual currency.

4. A digital representation of value that is not marketed, used, promoted, offered, or sold for investment or speculation. The Commissioner may adopt rules to clarify the scope and applicability of this paragraph (6)b.4.

(7) “Virtual-currency administration” means issuing virtual currency with the authority to redeem the currency for money, bank credit, or other virtual currency.

(8) a. “Virtual-currency business activity” means any of the following:

1. Exchanging, transferring, or storing virtual currency as part of a business or on behalf of a customer who has entered into an agreement with a business for the provision of such services.

2. 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.

b. “Virtual-currency business activity” does not include any of the following:

1. Peer-to-peer exchanges or transfers of virtual currency.

2. Software facilitating peer-to-peer exchanges or transfers that are intended to automatically execute, control, or document events and actions.

3. The development, publication, constitution, administration, maintenance, and dissemination of software in and of itself.

(9) “Virtual-currency control-services vendor” means a person that has control of virtual currency solely under an agreement with a person that, on behalf of another person, assumes control of virtual currency.

85 Del. Laws, c. 338, § 2; 

(a) This subchapter does not apply to the exchange, transfer, or storage of virtual currency or to virtual-currency administration to the extent any of the following laws govern the activity:

(1) The Electronic Fund Transfer Act of 1978, 15 U.S.C. §§ 1693 through 1693r, as amended.

(2) The Securities Exchange Act of 1934, 15 U.S.C. §§ 78a through 78oo, as amended.

(3) The Commodities Exchange Act of 1936, 7 U.S.C. §§ 1 through 27f, as amended.

(4) The Delaware Securities Act, Chapter 73 of Title 6.

(b) This subchapter does not apply to the following:

(1) A person that provides only connectivity software, computing power to a decentralized virtual currency network, or a protocol governing the transfer of digital value.

(2) A person that provides only data storage, cybersecurity, or noncustodial security services for a business engaged in virtual-currency activity, and does not otherwise hold or control virtual currency on behalf of another person.

(3) A person that provides virtual currency enterprise solutions solely to other exempt entities, provided the person has no direct relationship with and does not handle the assets of an end-user.

(4) A person using virtual currency, including creating, investing, buying or selling, or obtaining virtual currency as payment for the purchase or sale of goods or services, solely for any of the following purposes:

a. On its own behalf.

b. For personal, family, or household purposes.

c. For academic purposes.

(5) A person whose virtual currency business activity with or on behalf of persons is reasonably expected to be valued, in the aggregate, on an annual basis at $5,000 or less, measured by the U.S. dollar equivalent of virtual currency.

(6) An attorney to the extent of providing escrow services.

(7) A title insurance company to the extent of providing escrow services.

(8) A securities intermediary, as defined under § 8-102 of Title 6, or a commodity intermediary, as defined under § 9-102 of Title 6, that does all of the following:

a. Does not engage in virtual currency business activity with or on behalf of a person in the ordinary course of business, except to maintain securities accounts or commodities accounts.

b. Is regulated as a securities intermediary or commodity intermediary under federal law, the law of this State other than this chapter, or the law of another state.

c. Provides a person with protections that are at least as protective as those established under § 2337 of this title.

(9) A secured creditor under Article 9 of Subtitle I of Title 6 or a creditor with a judicial lien or lien arising by operation of law on collateral that is virtual currency. This exemption is limited to the creditor’s enforcement of the security interest in compliance with Article 9 of Subtitle I of Title 6 or compliance with the law applicable to the lien.

(10) A virtual currency control services vendor.

(11) A person that does not receive compensation from another person for any of the following:

a. Providing virtual currency products or services.

b. Conducting virtual currency business activity.

c. Engaging in testing products or services with the person’s own funds.

(c) The Commissioner may determine that a person or class of persons, given facts particular to the person or class, is exempt from this subchapter. In making this determination, the Commissioner shall consider whether the person or class is covered by requirements imposed under federal law on a money-service business.

85 Del. Laws, c. 338, § 2; 

(a) A person may not engage in virtual-currency business activity, or hold itself out as being able to engage in virtual-currency business activity, with or on behalf of another person unless the person is 1 of the following:

(1) Licensed in this State by the Commissioner pursuant to § 2307 of this title.

(2) Exempt from licensing under § 2305 of this title.

(b) A person that is licensed to engage in virtual currency business activity is engaged in the business of money transmission and is subject to the requirements of this subchapter.

85 Del. Laws, c. 338, § 2; 

(a) A licensee engaged in virtual-currency business activity shall provide all disclosures required by subsection (b) of this section and any additional disclosures the Commissioner deems necessary for consumer protection. These disclosures must be made separately from any other information, written in plain language, and presented in a clear and conspicuous manner in a record the person may retain. A licensee may propose alternate disclosure formats for the Commissioner’s approval if more appropriate for their specific digital platform.

(b) Before establishing a relationship with a person, a licensee must disclose, to the extent applicable to the virtual-currency business activity, that the licensee will undertake all of the following with the person:

(1) A schedule of fees and charges the licensee may assess, the manner by which fees and charges will be calculated if they are not set in advance and disclosed, and the timing of the fees and charges.

(2) Whether the product or service is covered by any of the following:

a. A form of insurance or is otherwise guaranteed against loss by an agency of the United States for the following:

1. Up to the full U.S. dollar equivalent of virtual currency purchased from the licensee or for control of virtual currency by the licensee as of the date of the placement or purchase, including the maximum amount provided by insurance under the Federal Deposit Insurance Corporation or otherwise available from the Securities Investor Protection Corporation.

2. If not provided at the full U.S. dollar equivalent of virtual currency purchased from the licensee or for control of virtual currency by the licensee, the maximum amount of coverage for each person expressed in the U.S. dollar equivalent of the virtual currency.

b. Private insurance against theft or loss, including cyber theft or theft by other means.

(3) The irrevocability of a transfer or exchange and any exception to irrevocability.

(4) The terms and conditions governing transfers and exchanges, including the following:

a. Liability for an unauthorized, mistaken, or accidental transfer or exchange.

b. The person’s responsibility to provide notice to the licensee of the transfer or exchange.

c. The basis for any recovery by the person from the licensee.

d. General error-resolution rights applicable to the transfer or exchange.

e. The method for the person to update the person’s contact information with the licensee.

(5) The date or time when the transfer or exchange is made and the person’s account is debited may differ from the date or time when the person initiates the instruction to make the transfer or exchange.

(6) Whether the person has a right to stop a pre-authorized payment or revoke authorization for a transfer and the procedure to initiate a stop-payment order or revoke authorization for a subsequent transfer.

(7) The person’s right to receive a receipt, trade ticket, or other evidence of the transfer or exchange.

(8) The person’s right to at least 30 days’ prior notice of a change in the licensee’s fee schedule, other terms and conditions of operating its virtual-currency business activity with the person and the policies applicable to the person’s account.

(9) That virtual currency is not money.

(c) Except as otherwise provided in subsection (d) of this section, at the conclusion of a virtual currency transaction with or on behalf of a person, a licensee shall provide the person a confirmation in a record that contains all of the following:

(1) The name and contact information of the licensee, including information the person may need to ask a question or file a complaint.

(2) The type, value, date, precise time, and amount of the transaction.

(3) The fee charged for the transaction, including any charge for conversion of virtual currency to money, bank credit, or other virtual currency.

(d) If a licensee discloses that it will provide a daily confirmation in the initial disclosure under subsection (c) of this section, the licensee may elect to provide a single, daily confirmation for all transactions with or on behalf of a person on that day instead of a per-transaction confirmation.

85 Del. Laws, c. 338, § 2; 

(a) A licensee that has control of virtual currency for 1 or more persons shall maintain control of virtual currency in each type of virtual currency sufficient to satisfy the aggregate entitlements of the persons to the type of virtual currency.

(b) If a licensee violates subsection (a) of this section, the property interests of the persons in the virtual currency are pro rata property interests in the type of virtual currency to which the persons are entitled, without regard to the time the persons became entitled to the virtual currency or the licensee obtained control of the virtual currency.

(c) The virtual currency referred to in this section must be all of the following:

(1) Held for the persons entitled to the virtual currency.

(2) Not property of the licensee.

(3) Not subject to the claims of creditors of the licensee.

(4) Deemed a permissible investment by regulations set forth by the Commissioner through regulation.

85 Del. Laws, c. 338, § 2; 

(a) A licensee engaged in virtual currency business activities must comply with all provisions of this subchapter to the extent applicable to the licensee’s activities.

(b) A licensee engaged in virtual currency business activities may include in its calculation of tangible net worth virtual currency, measured by the average value of the virtual currency in U.S. dollar equivalent over the prior 6 months, excluding control of virtual currency for a person entitled to the protections pursuant to § 2337 of this title.

(c) A licensee shall maintain, for all virtual currency business activity with or on behalf of a person 5 years after the date of the activity, a record of all of the following:

(1) Each transaction of the licensee with or on behalf of the person or for the licensee’s account in this State, including all of the following:

a. The identity of the person.

b. The form of the transaction.

c. The amount, date, and payment instructions given by the person.

d. The account number, name, and United States Postal Service address of the person, and, to the extent feasible, other parties to the transaction.

(2) The aggregate number of transactions and aggregate value of transactions by the licensee with or on behalf of the person and for the licensee’s account in this State, expressed in U.S. dollar equivalent of virtual currency for the previous 12 calendar months.

(3) Each transaction in which the licensee exchanges 1 form of virtual currency for money or another form of virtual currency with or on behalf of the person.

(4) A general ledger posted at least monthly that lists all assets, liabilities, capital, income, and expenses of the licensee.

(5) Each business call report the licensee is required to create or provide to the Commissioner or NMLS.

(6) Bank statements and bank reconciliation records for the licensee and the name, account number, and United States Postal Service address of each bank the licensee uses to conduct its virtual currency business activity with or on behalf of the person.

(7) A report of any dispute with the person.

(8) A report of any virtual currency business activity transaction with or on behalf of a person which the licensee was unable to complete.

(d) A licensee shall maintain records required under subsection (c) of this section in a form that enables the Commissioner to determine whether the licensee is in compliance with this chapter, any court order, and law of this State other than this chapter.

85 Del. Laws, c. 338, § 2; 

The Commissioner may adopt rules and regulations necessary for the administration of this subchapter.

5 Del. C. 1953, §  2318;  58 Del. Laws, c. 421;  85 Del. Laws, c. 338, § 2;