MONEY TRANSMISSION; VIRTUAL CURRENCY
Sponsored By: Jesse Kiehl (Democratic)
Became Law
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Bill Overview
Analyzed Economic Effects
18 provisions identified: 5 benefits, 1 costs, 12 mixed.
Customer funds held in trust with limits
Licensees must always keep permissible investments worth at least all outstanding customer obligations, held in trust for customers. The law sets caps on certain investments: receivables under seven days can be up to 50% of the total, any one delegate up to 10%, each short‑term category up to 20% and all such categories together up to 50%; foreign bank cash is capped at 10%. Letters of credit must be irrevocable, name the Department as beneficiary, auto‑extend yearly, and pay within seven days; the Department can draw if coverage may lapse. When a trust is established or a draw occurs, other states’ regulators are notified and funds are shared pro rata until obligations are paid.
Clear disclosures for crypto customers
Companies that handle virtual currency for you must keep enough of each coin to cover all customer claims. Your coins are your property, not the company’s, and are protected from the company’s creditors. If there is a shortfall, remaining assets are split fairly among customers. Before you sign up, you must get clear disclosures on fees, insurance or guarantees, whether transfers are final, liability rules, and at least 30 days’ notice before terms change. Each transaction must include a confirmation with key details, or a daily summary if properly disclosed.
Stronger rights when you send money
The law requires money transmitters to send your funds as agreed unless they reasonably suspect fraud or crime. If they do not send the money, they must explain why unless a law bars it. You can get a refund within 10 days after your written request unless narrow exceptions apply. You must receive a clear receipt with names, date, fees, taxes, and exchange rate. Companies must post how to file a complaint and list the state’s contact on receipts, websites, or apps.
Unclaimed crypto and other funds reported
Virtual currency in unclaimed property reports must list the coin type, quantity, U.S. dollar value on the abandonment date, and whether the holder controls the private keys. The law also expands which items count as intangible unclaimed property, like unpaid wages, refunds, gift certificates, security deposits, and stocks. This helps the state find and return more lost assets to owners.
Crypto definitions and small-activity exemptions
The law defines virtual‑currency services and key terms used to decide who must be licensed. Many small or narrow activities are exempt. People using crypto only for personal or household use, providers of storage or security, connectivity‑only contributors, and attorney or title‑insurer escrow are exempt. A de minimis exemption applies if annual virtual‑currency business activity is $5,000 or less. The Department may grant more exemptions for specific people or classes.
Enforcement cost recovery requires supermajority
A person found liable for a civil penalty must also pay the Department’s investigation and attorney costs. This cost‑recovery rule takes effect only if section 76 of the Act received a two‑thirds vote in each legislative chamber.
Unclaimed-property rules for virtual currency
Virtual currency is presumed abandoned five years after the later of a returned notice or the owner’s last activity. Holders must deliver it to the state in its native form, or keep custody until delivery is possible or declined. If delivery is postponed, an owner can file a claim; if allowed and delivery is possible, the holder must pay the owner. Other states can recover as well, but must agree to indemnify Alaska and any good‑faith holder. The law defines terms like “blockchain” and “private key” for these rules.
Capital, bonds, and net worth rules
Licensees must keep a surety bond or approved deposit sized to their average daily liability; the required amount cannot exceed $1,000,000 and must cover claims for at least five years after operations end. They must also maintain minimum tangible net worth: the greater of $35,000; 3% of the first $100 million of assets; 2% of the next $900 million; and 0.5% above $1 billion. For virtual‑currency firms, some virtual currency may count toward net worth using a six‑month average, but not customer‑controlled assets. Firms must keep key virtual‑currency records for five years.
Modern licensing, renewals, and timelines
Applicants must disclose ownership, finances, and experience, pay fees, and post required security. The Department decides within 120 days after a complete filing or the license takes effect; licenses generally expire December 31 and renew yearly with fees and a renewal report. Key people and controllers undergo fingerprints, a credit check, and, if they lived abroad in the past 10 years, an investigative report. The Department uses a national registry and joins multistate supervision to cut duplicate filings. If a state rule conflicts with federal law, federal law controls and the Department may issue guidance.
New licensing rules for money and crypto
Money transmission and virtual currency businesses must be licensed unless an exemption applies. The law clarifies who controls a company (10% ownership or voting power) and expands “money transmission” to include virtual currency activity. It lists many exempt entities like governments and insured banks, and lets the department exempt small‑volume payroll processors by rule. If you claim an exemption, you must provide proof. For remote orders, providers may rely on the customer’s address or their records to decide if a transaction is in‑state. Licenses cannot be transferred.
Records, reports, and privacy rules
Licensees must keep key records for at least five years, including transaction ledgers, bank statements, reconciliations, and delegate lists. Filing required federal currency and suspicious‑activity reports on time counts for state compliance, reducing duplicate filings. Information the department gets from you is confidential, with limited sharing to other regulators who keep it confidential. You may share customer financial data only with the customer’s OK, a legal order, or to complete a transaction.
Stronger exams and fast incident reporting
Licensees file audited financials within 90 days after fiscal year end. They file quarterly financial reports within 45 days and report major events within one business day. The Department can examine licensees and delegates, demand records, and usually charges reasonable exam and investigation costs and other proportionate fees. At the same time, record inspections are limited to the statutory examination powers. These rules raise oversight while keeping confidentiality and access boundaries.
Tighter rules for authorized delegates
Before using a delegate, a licensee must keep written policies, sign a compliant contract, and run a risk‑based background check. Delegates must hold customer money in trust after allowed fees and must stop service if the license is suspended, revoked, surrendered, or expires. Licensees must file a delegate list every quarter within 45 days, with names, tax IDs, contacts, and start/stop dates.
Renewal fees tied to your volume
The department sets annual license renewal fees based on your in‑state transmission volume. Total fees for the program must roughly match the state’s actual cost to regulate it. High‑volume firms may pay more; lower‑volume firms may pay less. Fee details come by regulation.
Tougher enforcement and fines for violators
The department can order a company or delegate to stop harmful conduct right away and can limit use of a troubled delegate. It can suspend or revoke licenses, put a company in receivership, and revoke a delegate’s designation. Civil fines can reach up to $10,000 per day, and unlicensed activity over $500 in 30 days is a felony (at $500 or less, a misdemeanor). You cannot provide transmission for an unlicensed or non‑exempt person; doing so creates joint and several liability. Companies keep due‑process rights, including notice, hearings, and the ability to ask a court to review or seek relief.
Ownership changes need approval and notices
You must get written approval and pay a nonrefundable fee before acquiring control of a licensee. Once an acquisition filing is complete, the Department has 120 days to decide or it is approved; some transfers are exempt but must be reported within 15 days. Owning 10% or more of voting shares, counting family or household members with you, presumes control unless you qualify as a passive investor and attest. Previously approved parties can use a shorter notice that is considered approved after 30 days if not disapproved. When a licensee changes a key individual, it must notify within 15 days, submit details within 45 days, and is subject to a 90‑day disapproval window.
Transition rules and old law repeals
If you hold a valid money services license on June 30, 2027, you may keep operating under it until you renew under the new law or until July 1, 2028, whichever is later. Existing contracts and legal rights from before the change stay in force. Older money‑transmission sections are repealed as the new framework takes effect. Agencies may adopt rules, but not before the related law takes effect.
Approved investments to back customer funds
The law lists what counts as permissible investments to meet customer‑fund requirements. Examples include cash, insured deposits, AAA money market funds, CDs, senior bank debt, U.S. obligations, qualifying standby letters of credit, and certain surety bond amounts. The department can limit mix and allow others by rule.
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
(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) TITLE CHANGE: HCR 17
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) FIN HCS ADOPTED UC
5/11/2026House(H) READ THE SECOND TIME
5/11/2026House(H) RULES TO CALENDAR 5/11/2026
5/11/2026House(H) FN2: (CED)
5/6/2026House(H) NR: TOMASZEWSKI
5/6/2026House(H) FOSTER
5/6/2026House(H) DP: JIMMIE, GALVIN, STAPP, HANNAN, ALLARD, MOORE, BYNUM, SCHRAGE, JOSEPHSON,
5/6/2026House(H) FIN RPT HCS(FIN) NEW TITLE 10DP 1NR
5/6/2026House(H) TITLE CHANGE: HCR 17
5/5/2026House(H) Moved HCS CSSB 86(FIN) Out of Committee
5/4/2026House(H) FINANCE at 01:30 PM ADAMS 519
5/4/2026HouseAudio/Video
5/4/2026House(H) Heard & Held
4/28/2026House(H) FINANCE at 01:30 PM ADAMS 519
4/28/2026House
Bill Text
HCS CSSB 86(FIN)
5/6/2026
CSSB 86(FIN)
4/14/2025
SB 86
2/5/2025