HOUSE BILL 649
54th legislature - STATE OF NEW MEXICO - first session, 2019
Zachary J. Cook
RELATING TO FINANCIAL INSTITUTIONS; ENACTING THE INTERNET BUSINESS DEVELOPMENT AND INNOVATIONS ACT; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Internet Business Development and Innovations Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Internet Business Development and Innovations Act:
A. "cryptovalue" means tokens, coins or cryptocurrencies that are math-based, decentralized and convertible virtual currencies, protected by cryptography, and that rely on cryptographic techniques to achieve validity consensus but that:
(1) are neither issued nor guaranteed by any public authority;
(2) do not have the legal status of fiat currency; and
(3) are accepted or used on a voluntary basis;
B. "cryptovalue creator and distributor" means a business that may create cryptovalue or distribute, transmit or redeem for fiat currency its own cryptovalue;
C. "cryptovalue exchange" means a business that brokers, between individual buyers and sellers, the exchange of cryptovalue that has been transmitted and verified via a distributed ledger technology, or the fiat payment therefor;
D. "director" means the director of the division;
E. "division" means the financial institutions division of the regulation and licensing department; and
F. "licensee" means a person licensed pursuant to the Internet Business Development and Innovations Act.
SECTION 3. [NEW MATERIAL] LICENSE REQUIRED--LICENSE REQUIREMENTS--LIMITATION ON BUSINESS ACTIVITIES.--
A. A person shall not engage in business as a cryptovalue creator and distributor or as a cryptovalue exchange without first having obtained a license to do so from the division.
B. Licensees shall pay to the division an annual licensing fee of one hundred dollars ($100).
C. A licensee shall be an active corporation organized pursuant to the laws of New Mexico.
D. A cryptovalue creator and distributor and a cryptovalue exchange is not a money service as defined in Subsection P of Section 58-32-102 NMSA.
E. The board of directors for a licensee shall include at least one member who is an attorney licensed to practice law in the state of New Mexico.
F. The registered agent for the licensee shall be an attorney licensed to practice law in the state of New Mexico.
G. A license issued pursuant to this section does not authorize the licensee to transact equity sales, portfolio management, investment, long or short sales or margin trading or engage in other traditional stock market exchange functions.
SECTION 4. [NEW MATERIAL] RESTRICTED ACTIVITIES--FUNDS.-- A. A licensee operating as a cryptovalue creator and distributor shall not issue cryptovalue in exchange for equity stock in its corporation. With that exception, such a licensee may issue creative and innovative cryptovalue, without registration or licensing as a New Mexico securities product. Any such issuance shall be clearly marked in substantially this manner: "This cryptovalue has not been examined, regulated or endorsed by the State of New Mexico. As such, any purchaser hereof understands and accepts the potentially high risk associated with this product.".
B. Funds generated by a licensee operating as a cryptovalue exchange shall be kept in a financial institution doing business in New Mexico, which institution is either state or federally chartered. A financial institution chartered in New Mexico is expressly permitted to accept such deposits.
SECTION 5. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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