MONEY TRANSMISSION; VIRTUAL CURRENCY
Sponsored By: Jesse Kiehl (Democratic)
Became Law
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Bill Overview
Analyzed Economic Effects
23 provisions identified: 6 benefits, 4 costs, 13 mixed.
Stronger protection for customers' held funds
Beginning July 1, 2027, licensed providers holding customer virtual currency must keep enough of each type to cover customer balances. That currency belongs to customers and cannot pay the provider's creditors; shortages give customers proportional ownership shares. Assets backing money transfers are protected in a trust during bankruptcy and other covered financial troubles. Customers share trust assets fairly, and the trust ends once all covered obligations are paid. Alaska's regulator can also address harmful conduct by a provider's authorized agents.
Money senders gain timely refunds
Beginning July 1, 2027, providers must send money as agreed, but can hold transfers over reasonable fraud or crime concerns. When asked, they must explain a failure to send unless the law bars an explanation. Refunds are generally due within 10 days after a written request identifying the sender and, for multiple transfers, the transaction. Exceptions cover money forwarded or committed within 10 days, qualifying later-transfer agreements, crime-related holds, and missing identifying information. The refund rule excludes transfers covered by federal remittance rules and payments processed under written provider-payee agreements for goods or services.
Transfer customers gain financial privacy protections
Beginning July 1, 2027, licensed money transfer providers and their authorized agents face limits on sharing customer financial information. Sharing is allowed only with written customer permission, as legally required, or as part of the customer's requested transfer.
Transfer customers get receipts and complaint help
Beginning July 1, 2027, covered transfers require receipts listing applicable sender, recipient, date, transaction ID, provider, amount, fees, taxes, and exchange rate. Receipts use English and other languages mainly used to advertise or arrange the transfer. In-person electronic receipts require the sender's request or agreement; electronic receipts must be saveable. Exceptions include specified federally regulated, non-personal, payee-agreement, and stored-value transactions. Service locations must provide complaint instructions, and receipts, websites, or apps must give the state department's name, phone number, and complaint contact notice. The department can also publish nonconfidential provider contacts, redacted bond terms, final orders, and penalties online.
Virtual currency customers get clearer terms
Beginning July 1, 2027, licensed virtual currency services must give customers clear, saveable disclosures before starting a business relationship. Disclosures explain fees, insurance or guarantees, irreversible transfers, timing, loss risks, and liability for unauthorized transfers or errors. They also explain error recovery, rights to stop preauthorized payments, and receipt practices. Customers get at least 30 days' notice before covered fee or term changes. Transaction records must show amounts, value, date and time, conversions, and fees; daily records are allowed only with advance disclosure.
Existing money transfer licenses keep working
Beginning July 1, 2027, Alaska replaces listed older money-services rules as part of its updated system. Contracts, rights, liabilities, and duties in effect the day before the relevant change remain valid. Businesses with valid licenses or approvals on June 30, 2027, can keep operating. This protection lasts until renewal under the new law or through July 1, 2028, whichever is later.
Stricter rules for money transfer businesses
Beginning July 1, 2027, Alaska's money transfer rules cover virtual currency exchange, transfer, storage, and administration. Qualifying rewards, game-only value, closed-loop value, and businesses providing only online or network services are excluded. Ownership or voting power of at least 10% counts as control, down from 25%. Power over most managers or company policies also counts as control. Licensed businesses must keep specified financial records for at least five years, up from three.
Transfer agents face contracts and shared liability
Before appointing agents, licensed firms must adopt written policies, conduct risk-based background checks, and sign written contracts. Contracts must cover legal compliance, money handling, records, and state examinations. Agents hold transfer money, minus fees, in trust for the licensed firm, including that amount within mixed funds. When a license ends or is suspended, agents must stop immediately; firms have five business days to document that agents were notified. Anyone transmitting money for a person who is neither licensed nor exempt shares full legal responsibility with that person.
Transfer firms must report finances promptly
Firms must file quarterly financial, transfer, investment, destination-country, and agent reports within 45 days; financial-report deadlines can be extended. Independent audited financial statements are due within 90 days after each fiscal year, unless the state allows more time. Bankruptcy, receivership, dissolution, license proceedings elsewhere, security impairment, and specified felony matters require notice within one business day after firms have reason to know. Firms and agents must file required federal currency and suspicious-transaction reports; accurate, timely federal filings satisfy this state requirement. Virtual currency firms must retain customer, transaction, financial, dispute, and unfinished-transaction records for five years after the activity.
Transfer firms renew yearly and pay fees
Initial licenses generally end December 31; licenses issued November 1–December 31 last through the following year, unless ended earlier or adjusted by regulation. Firms must renew yearly, pay fees, report unreported major changes, and stay qualified; renewal terms run January 1–December 31. The state can extend renewal deadlines for good cause and suspend or revoke licenses when firms no longer qualify. Renewal fees reflect Alaska transfer volume, while total license fees roughly cover regulatory costs separately from currency exchange; fair oversight charges also apply. Licenses in force June 30, 2027, can continue under prior law through renewal or until July 1, 2028.
Inactive virtual currency enters unclaimed-property rules
Beginning July 1, 2027, Alaska's unclaimed-property law includes virtual currency. It is presumed abandoned five years after the later of a qualifying returned notice or the owner's last ownership action. Transactions, account access, and other acts showing knowledge of the property can count as ownership actions. Written or electronic contact with the holder during the previous five years prevents that presumption. Non-state claimants can recover currency whose delivery was postponed when Alaska approves the claim and the holder can deliver it. Alaska must defend and protect a holder against later claims after good-faith delivery and written notice of the later claim.
Currency holders face duties and liability protections
Beginning July 1, 2027, holders reporting unclaimed virtual currency must list its type, quantity, dollar value at abandonment, and private-key control. Holders must deliver it to Alaska in its native form, rather than cashing it out. If delivery is impossible, holders must retain it until delivery becomes possible, statutory release requirements are met, or Alaska declines custody. Alaska can postpone impractical delivery or custody that remains uneconomical despite best efforts. Holders must deliver postponed currency to another state after Alaska approves that state's entitlement, gives notice, and delivery is possible. Before interstate recovery, the other state must agree to cover property claims against Alaska, its officials, and applicable delivering holders.
Higher transfer penalties, narrower enforcement orders
Beginning July 1, 2027, Alaska can fine money transfer violators up to $10,000 per day, up from $1,000. This applies to violations of the money transfer law, its regulations, or orders issued under it. People found liable also owe investigation and prosecution costs, including reasonable attorney fees. The separate show-cause process for cease-and-desist orders is narrowed to suspected violations of the money transmission licensing requirement.
Money transfer firms need state licenses
Beginning July 1, 2027, Alaska requires money transfer firms to hold licenses unless they qualify for an exemption or act as authorized agents. Applicants must provide business, financial, and background information, pay fees, provide security, and pay reasonable on-site investigation costs. The state reviews their finances, experience, skills, character, and fitness, and can accept another state's investigation. Complete applications receive decisions within 120 days, unless extended for good cause; missed deadlines trigger approval the next business day. For online or phone transfers, firms can use customer information and account records to determine whether customers are in Alaska.
Some payment providers qualify for exemptions
Specified employees, payment agents, financial-service providers, and intermediaries qualify for money transfer exemptions. Some must have written agreements, identify the provider, or assign legal responsibility and risk of loss to an exempt entity. Attorneys, insurers, and escrow businesses qualify only for transfers that support their authorized work. The state can exempt payroll processors by regulation when transfer volume is minor compared with typical licensees, or grant public-interest exemptions when regulation is unnecessary. Anyone claiming an exemption must provide supporting records when the state requests them.
Transfer firm buyers face approval rules
Buyers generally need written state approval and a nonrefundable application fee before taking control of a licensed firm. Complete applications receive decisions within 120 days, extendable for good cause; no decision means approval, while specified public offerings and internal reorganizations are exempt. Previously approved buyers can use a 30-day notice route with no specified suspensions or revocations in five years, sound management, projected compliance, and no major business-plan change. A holding of at least 10% of voting interests creates a presumption of control, counting specified family and household holdings together. Passive investors avoid control status only by attesting to limits on management, election powers, and controlling influence.
Transfer firm leaders face background checks
Owners with control, proposed controlling owners, and key leaders must provide personal, work, credit, criminal, regulatory, and civil-litigation histories. Most must submit fingerprints for a national criminal check; people currently abroad who lived abroad throughout the past 10 years are exempt. Anyone who lived abroad during those 10 years must provide an independent investigative background report. Firms must report added or replacement leaders within 15 days and provide required information within 45 days. The state has 90 days after complete notice to disapprove a leader; otherwise approval follows, with 30 days to appeal disapproval and multistate reviews allowed.
Transfer firms face discipline and relief
The state can suspend or revoke licenses, place firms in receivership, or revoke agent approvals on listed legal grounds. It can consider experience, skills, character, and fitness, including the firm's key leaders and responsible people. Firms and agents whose approvals are suspended or revoked can apply for relief through state-prescribed procedures.
Transfer firms face exams with confidentiality
The state can examine firms and agents, demand records in specified formats and locations, and question leaders or employees under oath. Licensees pay reasonable examination costs unless the state directs otherwise. Application, examination, investigation, and business reports generally remain confidential rather than open to public-record requests. The state can share records with agencies promising confidentiality, or release them when needed for public protection and justice. It can also publish licensee lists and combined financial or transaction data.
Transfer firms must back customer balances
Firms must continuously hold approved investments worth at least their unpaid transfer obligations; the state can limit assets or approve liquid, high-quality alternatives. Approved assets include specified cash, deposits, rated investments, and government debt; virtual currency can back only virtual currency obligations. Agent receivables must be less than seven days old, capped at 50% overall and 10% from one agent. Specified rated-investment categories have 20% individual and 50% combined caps; qualifying foreign-depository customer funds have a 10% cap and examination, rating, registration, sanctions, and location requirements. Qualifying standby letters of credit also count, with 60-day nonrenewal notice; the state can draw funds into trust if continued backing is not demonstrated 15 days before expiration.
Transfer firms must maintain minimum net worth
Firms must continuously maintain tangible net worth equal to the greater of $35,000 or an asset-based total. That total adds 3% of the first $100 million in assets, 2% of the next $900 million, and 0.5% above $1 billion. Applicants must demonstrate net worth with their latest financial statements; the state can grant partial or full exemptions. Firms can count their own virtual currency using its average dollar value over the previous six calendar months. Protected customer virtual currency cannot count toward the firm's net worth.
Transfer firms need bonds for claims
Applicants must provide a surety bond or state-approved deposit, and licensed firms must maintain it continuously. Required security reflects average daily Alaska transfer liability and cannot be required to exceed $1 million; firms can post more. Firms maintaining the maximum bond need not calculate average daily liability for this requirement. Bonds must come from an Alaska-authorized surety and cover claims for at least five years after service ends, subject to permitted reductions or replacement.
Virtual currency firms face licensing rules
Virtual currency businesses need a money transfer license or a licensing exemption, and licensed activity follows money transfer rules. Separate exemptions from specific virtual currency rules cover personal, family, household, and academic use. They also cover activity reasonably expected to total $5,000 or less annually, measured in dollar value. Some software, storage, escrow, creditor, intermediary, and unpaid services qualify; regulated securities or commodity intermediaries must provide comparable customer protections. The state can also exempt people or groups based on their particular facts.
Sponsors & Cosponsors
Sponsor
Jesse Kiehl
Democratic • Senate
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
Actions Timeline
(H) FN2: (CED)
9/30/2026House(H) FN(S) ATTACHED TO APPROP. BILL HB 263
9/30/2026House(H) LEG FINANCE APPROPRIATION MESSAGE 9/8/26
9/30/2026House(S) LEG FINANCE APPROPRIATION MESSAGE 9/8/26
9/30/2026Senate(S) EFFECTIVE DATE(S) OF LAW SEE CHAPTER
7/16/2026Senate(S) LAW W/O GOVERNOR SIGNATURE 6/30 CHAPTER 48 SLA 26
7/16/2026Senate(S) 3:55 P.M. 6/15/26 TRANSMITTED TO GOVERNOR
6/15/2026Senate(S) MANIFEST ERROR(S)
6/15/2026Senate(S) EFFECTIVE DATE(S) SAME AS PASSAGE
5/15/2026Senate(S) COURT RULE(S) SAME AS PASSAGE
5/15/2026Senate(S) CONCUR AM OF (H) Y20 N-
5/15/2026Senate(S) CONCUR MESSAGE TAKEN UP
5/15/2026Senate(S) CONCUR MESSAGE READ
5/14/2026Senate(H) VERSION: HCS CSSB 86(FIN)
5/13/2026House(H) TRANSMITTED TO (S) AS AMENDED
5/13/2026House(H) RECONSIDERATION NOT TAKEN UP
5/13/2026House(H) JOHNSON NOTICE OF RECONSIDERATION
5/12/2026House(H) EFFECTIVE DATE(S) SAME AS PASSAGE
5/12/2026House(H) COURT RULE(S) SAME AS PASSAGE
5/12/2026House(H) PASSED Y40
5/12/2026House(H) READ THE THIRD TIME HCS CSSB 86(FIN)
5/12/2026House(H) ADVANCED TO THIRD READING 5/12 CALENDAR
5/11/2026House(H) TITLE CHANGE: HCR 17
5/11/2026House(H) FIN HCS ADOPTED UC
5/11/2026House(H) READ THE SECOND TIME
5/11/2026House
Bill Text
Enrolled SB 86
5/15/2026
HCS CSSB 86(FIN)
5/6/2026
CSSB 86(FIN)
4/14/2025
SB 86
2/5/2025