Public Act 104-0429 (SB 2319), Digital Asset Kiosk Act
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Public Act 104-0429
SB2319 Enrolled LRB104 09000 BAB 19056 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Digital Asset Kiosks Act.
Section 5. Purpose and construction. The purpose of this
Act is to protect the People of Illinois against the fraud and
scams in digital asset kiosk transactions by providing
necessary registration requirements, disclosures, and other
safeguards for customers. This Act shall be liberally
construed to effectuate its purpose.
Section 10. Definitions. As used in this Act:
"Affiliate" means any person that controls, is controlled
by, or is under common control with another person. As used in
this paragraph, "control" means the possession, direct or
indirect, of the power to direct or cause the direction of the
management and policies of a person.
"Applicant" means a person that applies for registration
under this Act.
"Bank" means a bank, savings bank, savings-and-loan
association, savings association, or industrial loan company
chartered under the laws of this State or any other state or
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under the laws of the United States.
"Blockchain analytics" means the analysis of data from
blockchains or public distributed ledgers, including
associated transaction information.
"Blockchain analytics software" means a software service
that uses blockchain analytics data to provide risk-specific
information about digital asset wallet addresses, among other
things.
"Charges" means: (i) fees or expenses paid by the
customer; and (ii) the difference between the market price of
the digital asset and the price of the digital asset charged to
the customer.
"Confidential supervisory information" means information
or documents obtained by employees, agents, or representatives
of the Department in the course of any examination,
investigation, audit, visit, registration, certification,
review, licensing, or any other regulatory or supervisory
activity pursuant to this Act, and any record prepared or
obtained by the Department to the extent that the record
summarizes or contains information derived from any report,
document, or record described in this Act.
"Credit union" means a credit union chartered under the
laws of this State or any other state or under the laws of the
United States.
"Department" means the Department of Financial and
Professional Regulation.
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"Digital asset" means a digital representation of value
that is used as a medium of exchange, unit of account, or store
of value and that is not fiat currency, whether or not
denominated in fiat currency. "Digital asset" does not include
any of the following: (i) a digital representation of value
which a merchant grants, as part of an affinity or rewards
program, and that cannot be taken from or exchanged with the
merchant for fiat currency or a digital asset; (ii) a digital
representation of value that is issued by or on behalf of a
game publisher, used solely within a gaming platform, has no
market or application outside of such gaming platform, and
cannot be converted into, or redeemed for, fiat currency or
digital assets; or (iii) a digital representation of value
that is used as part of prepaid cards.
"Digital asset exchange" means an exchange that
facilitates the buying, selling, or exchanging of digital
assets for fiat currency or other digital assets that is
licensed to conduct business in New York as a Virtual Currency
Business Activity licensee or in California under the Digital
Financial Assets Law.
"Digital asset kiosk" means an automated teller machine
that facilitates the buying, selling, or exchanging of digital
assets for fiat currency or other digital assets.
"Digital asset kiosk operator" means a registrant or a
person required to register pursuant to this Act.
"Existing customer" means a person who transacts with the
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operator following the new customer period. For the avoidance
of doubt, "existing customer" includes any customer that is
not a new customer.
"Federally insured depository institution" shall mean an
insured depository institution as defined by Section 3(c)(2)
of the Federal Deposit Insurance Act, 12 U.S.C. 1813(c)(2), as
amended, or an insured credit union as defined by Section
101(7) of the Federal Credit Union Act, 12 U.S.C. 1752(7), as
amended.
"Fiat currency" means a medium of exchange or unit of
value issued by the United States or a foreign government and
that is designated as legal tender in its country of issuance.
"Insolvent" means any of the following: (i) having
generally ceased to pay debts in the ordinary course of
business other than as a result of a bona fide dispute, (ii)
being unable to pay debts as they become due, and (iii) being
insolvent within the meaning of federal bankruptcy law.
"Market price of the digital asset" means the current
market price of a particular digital asset publicly quoted on
a digital asset exchange for a particular time, subject to any
rules adopted by the Department.
"New customer" means a person who has never previously
transacted with the operator. The new customer shall remain
defined as such during the earlier of: (i) the customer's
first 3 transactions after opening an account with the
operator, or (ii) 7 days after opening an account with the
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operator.
"Operator" means a person who owns, operates, or manages a
digital asset kiosk located in this State.
"Person" means, without limitation, any individual,
corporation, business trust, estate, trust, partnership,
proprietorship, syndicate, limited liability company,
association, joint venture, government, governmental
subsection, agency or instrumentality, public corporation or
joint-stock company, or any other organization or legal or
commercial entity.
"Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and
is retrievable in perceivable form.
"Registrant" means a person registered under this Act.
"Request for assistance" means all inquiries, complaints,
account disputes, and requests for documentation a digital
asset kiosk operator receives from residents.
"Responsible individual" means an individual who has
direct control over, or significant management, policy, or
decision-making authority with respect to, a person's digital
asset kiosk business activity in this State.
"Secretary" means the Secretary of Financial and
Professional Regulation and any authorized representative of
the Secretary.
"Service provider" means any person that provides a
material service to a digital asset kiosk operator in
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connection with the offering or provision by that operator of
a digital asset business activity in this State, including a
person that either (i) participates in designing, operating,
or maintaining the digital asset business activity, or (ii)
processes transactions relating to a digital asset kiosk
transaction then unknowingly or incidentally transmitting or
processing financial data in a manner that the data is
undifferentiated from other types of data of the same form as
the person transmits or processes.
"Tangible net worth" means the aggregate assets of a
registrant, excluding all intangible assets, less liabilities,
as determined in accordance with the United States' generally
accepted accounting principles.
Section 15. General powers and duties.
(a) The Department shall have the following functions,
powers, and duties, in carrying out its responsibilities under
this Act:
(1) to issue or refuse to issue any registration or
other authorization under this Act;
(2) to revoke or suspend for cause any registration or
other authorization under this Act;
(3) to keep records of all registrations or other
authorizations under this Act;
(4) to receive, consider, investigate, and act upon
complaints made by any person relating to any digital
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asset kiosk in this State;
(5) to prescribe the forms of and receive:
(A) applications for registrations or other
authorizations under this Act; and
(B) all reports and all books and records required
to be made under this Act;
(6) to subpoena documents and witnesses and compel
their attendance and production, to administer oaths, and
to require the production of any books, papers, or other
materials relevant to any inquiry authorized by this Act
or other law applicable to digital asset business activity
in this State;
(7) to issue orders against any person:
(A) if the Secretary has reasonable cause to
believe that an unsafe, unsound, or unlawful practice
has occurred, is occurring, or is about to occur;
(B) if any person has violated, is violating, or
is about to violate any law, rule, or written
agreement with the Secretary; or
(C) for the purpose of administering the
provisions of this Act or other applicable law.
(8) to address any inquiries to any digital asset
kiosk operator or the directors, officers, or employees of
the digital asset kiosk operator, or the affiliates or
service providers of the digital asset kiosk operator, in
relation to the digital asset kiosk operator's activities
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and conditions or any other matter connected with its
affairs, and it shall be the duty of any person so
addressed to promptly reply in writing to those inquiries.
The Secretary may also require reports from any digital
asset kiosk operator at any time the Secretary chooses;
(9) to examine the books and records of every digital
asset kiosk operator, affiliate, or service provider;
(10) to enforce the provisions of this Act.
(11) to levy fees, fines, and civil penalties, charges
for services, and assessments to defray operating
expenses, including direct and indirect costs, of
administering this Act.
(12) to appoint examiners, supervisors, experts, and
special assistants as needed to effectively and
efficiently administer this Act.
(13) to conduct hearings for the purpose of carrying
out the purposes of this Act;
(14) to exercise visitorial power over a digital asset
kiosk operator, affiliate, or service provider;
(15) to enter into cooperative agreements with federal
and State regulatory authorities and to accept reports of
examinations from federal and State regulatory
authorities;
(16) to impose civil penalties against a digital asset
kiosk operator, affiliate, or service provider for failing
to respond to a regulatory request or reporting
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requirement;
(17) to perform any other lawful acts necessary or
desirable to carry out the purposes and provisions of this
Act.
(b) The Department may share any information obtained
pursuant to this Act with law enforcement officials or other
regulatory agencies.
Section 20. Funds.
(a) All moneys collected or received by the Department
under this Act shall be deposited into the Digital Asset Kiosk
Fund. The amounts deposited into the Digital Asset Kiosk Fund
shall be used for the ordinary and contingent expenses of the
Department in administering this Act and other financial laws.
Nothing in this Act shall prevent the continuation of the
practice of paying expenses involving salaries, retirement,
social security, and State-paid insurance of State officers
and employees by appropriation from the General Revenue Fund
or any other fund. Moneys deposited into the Digital Asset
Kiosk Fund may be transferred to the Professions Indirect Cost
Fund or any other Department fund.
(b) The expenses of administering this Act, including
investigations and examinations provided for in this Act,
shall be borne by and assessed against persons regulated by
this Act. The Department may establish fees by rule, including
in the following categories:
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(1) investigation of registrants and registration
applicant fees;
(2) examination fees;
(3) contingent fees; and
(4) such other categories as may be required to
administer this Act.
(c) The Department shall charge and collect fees from
digital asset kiosk operators, which shall be nonrefundable
unless otherwise indicated, for the expenses of administering
this Act as follows:
(1) Each digital asset kiosk operator shall pay $150
for each hour or part of an hour for each examiner or staff
assigned to the supervision of the digital asset kiosk
operator plus actual travel costs for any examination
pursuant to the Act. Supervision of operators includes,
but is not limited to, examination, audit, visit,
registration, certification, review, investigation, or any
other regulatory activity conducted pursuant to this Act.
(2) Each digital asset kiosk operator shall pay to the
Department its pro rata share of the cost for
administration of this Act that exceeds other fees listed
in this Act, as estimated by the Department, for the
current year and any deficit actually incurred in the
administration of the Act in prior years. The total annual
assessment for all registrants shall initially be divided
into a transaction-based assessment. Each registrant's pro
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rata share shall be based on the percentage of the total
United States dollar value of all digital asset kiosk
transactions by all registrants in Illinois per calendar
year.
(d) The Department may, by rule, amend any fees set forth
in this Act. The Department may establish additional fees by
rule as set forth in this Section.
Section 25. Daily transaction limit.
(a) A digital asset kiosk operator shall not accept or
dispense more than $2,500 or equivalent monetary value in a
day from or to the same new customer through a digital asset
kiosk.
(b) A digital asset kiosk operator shall not accept or
dispense more than $10,500 or the equivalent monetary value in
a day from or to any existing customer through a digital asset
kiosk.
Section 30. Customer charges limit. A digital asset kiosk
operator may not, directly or indirectly, collect charges from
a customer related to a single digital asset kiosk transaction
that exceeds the greater of the following:
(1) $5; or
(2) 18% of digital assets involved in the transaction
according to the market price of the digital asset at the
time the customer initiates the transaction.
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Section 35. Customer disclosures.
(a) Before engaging in each digital asset kiosk
transaction with a customer, a digital asset kiosk operator
shall provide written disclosure, in English and in the same
language principally used by the digital asset kiosk operator
to advertise, solicit, or negotiate with a customer,
containing the terms and conditions of the transaction that
include, at a minimum, all of the following:
(1) The amount of the digital assets involved in the
transaction.
(2) The amount, in United States dollars, of any
charges collected by the operator.
(3) The United States dollar price of the digital
assets that is charged to the customer and the United
States dollar market price of the digital assets.
(4) All procedures for providing refunds as required
by Section 45 of this Act and other methods to reverse or
refund a transaction offered by the digital asset kiosk
operator.
(5) A warning written prominently in bold type stating
the following: "Warning: Losses due to fraudulent or
accidental transactions may not be recoverable and
transactions are irreversible except as otherwise set
forth in this disclosure.".
(6) Digital assets are not legal tender, are not
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backed by the government, and accounts and value balances
are not subject to Federal Deposit Insurance Corporation
or Securities Investor Protection Corporation protections.
(7) Legislative and regulatory changes or actions at
the State, federal, or international level may adversely
affect the use, transfer, exchange, and value of digital
assets.
(8) Some digital asset transactions shall be deemed to
be made when recorded on a public ledger, which is not
necessarily the date or time that the customer initiates
the transaction.
(9) The value of a digital asset may be derived from
the continued willingness of market participants to
exchange fiat currency for digital assets, which may
result in the potential for permanent and total loss of
value of a particular digital asset should the market for
that digital asset disappear.
(10) There is no assurance that a person who accepts a
digital asset as payment today will continue to do so in
the future.
(11) The volatility and unpredictability of the price
of a digital asset relative to fiat currency may result in
significant loss over a short period of time.
(12) The nature of digital assets may lead to an
increased risk of fraud or cyberattack.
(13) The nature of digital assets means that any
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technological difficulties experienced by the digital
asset kiosk operator may prevent access or use of a
customer's digital assets.
(14) Any bond or trust account maintained by the
digital asset kiosk operator for the benefit of its
customers may not be sufficient to cover all losses
incurred by customers.
(b) The disclosures required by this Section shall be
clear and conspicuous and provided separately from any other
disclosure provided by the digital asset kiosk operator.
(c) A digital asset kiosk operator shall provide a
customer with a receipt for any transaction made at the
digital asset kiosk operator's digital asset kiosk that
includes all of the following information:
(1) The name of the customer.
(2) The date and time of the transaction.
(3) The name and contact information of the digital
asset kiosk operator.
(4) The amount of the digital assets and any digital
asset addresses involved in the transaction.
(5) The amount of United States dollars or other fiat
currency involved in the transaction.
(6) The amount, in United States dollars, of any
charges collected by the digital asset kiosk operator in
relation to the transaction.
(7) The amount, in United States dollars, of any
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spread between the United States dollar price of the
digital asset that is charged to the customer and the
United States dollar market price of the digital asset.
(8) All procedures for providing refunds as required
by this Act and any other methods to reverse or refund the
transaction offered by the digital asset kiosk operator.
Section 40. Reporting physical addresses.
(a) A digital asset kiosk operator shall provide to the
Department a list of all physical addresses of digital asset
kiosks that the digital asset kiosk operator owns, operates,
or manages in this State, in a form prescribed by the
Department.
(b) A digital asset kiosk operator shall provide the
Department with updates to the list required by subsection (a)
of this Section within 30 days after any changes in a form
prescribed by the Department.
(c) The Department shall make the list required by
subsection (a) of this Section and contact information of each
digital asset kiosk operator available to the public on the
Department's website.
Section 41. Customer service. All digital asset kiosk
operators performing business in this State must provide live
customer service during kiosk operating hours. The customer
service toll-free number must be displayed on the digital
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asset kiosk or on the digital asset kiosk screen.
Section 42. Prevention of fraudulent activity. All digital
asset kiosk operators must take reasonable steps to detect and
prevent fraud, including establishing and maintaining a
written anti-fraud policy.
Section 43. Blockchain analytics. All digital asset kiosk
operators must use blockchain analytics software to help
prevent transactions to wallets known to be affiliated with
fraudulent activity at the time of a transaction and to detect
transaction patterns indicative of fraud or other illicit
activities.
Section 44. Law enforcement access to investigative
information. All digital asset kiosk operators performing
business in this State must provide a dedicated communications
line for relevant government agencies through a posted U.S.
phone number or email address. This dedicated line shall
facilitate law enforcement and regulatory agency
communications with the digital asset kiosk operator in the
event of a fraud report from a customer. The communications
line must be frequently monitored.
Section 45. Refunds.
(a) A digital asset kiosk operator must issue a refund to a
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new customer for the full amount for up to 3 fraudulent
transactions made within the new customer period, upon request
of the customer. To receive a refund under this subsection, a
new customer must:
(1) have been fraudulently induced to engage in a
transaction or transactions involving the digital asset
kiosk;
(2) within 30 days after the last transaction to occur
during the new customer period, contact the digital asset
kiosk operator to inform them of the fraudulent nature of
the transaction or transactions at issue; and
(3) within 60 days after the last transaction to occur
during the new customer period, submit a police report or
government agency report of the transaction or
transactions to the digital asset kiosk operator.
(b) A digital asset kiosk operator must issue a refund to
an existing customer for the full amount of all charges upon
request of an existing customer. To receive a refund under
this subsection, an existing customer must:
(1) have been fraudulently induced to engage in a
transaction or transactions involving the digital asset
kiosk;
(2) within 30 days after the transaction or
transactions at issue, contact the digital asset kiosk
operator to inform them of the fraudulent nature of the
transaction or transactions at issue; and
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(3) within 60 days after the transaction or
transactions at issue, submit a police report or
government agency report of the transaction or
transactions to the digital asset kiosk operator.
Section 50. Registration required.
(a) A person shall not operate a digital asset kiosk in
this State unless the person is registered with the Department
pursuant to this Act or exempt from this Act.
(b) A person with any operational digital asset kiosks in
this State as of the effective date of this Act shall not be
required to be registered with the Department until July 1,
2027.
Section 55. Applications.
(a) An application for a registration under this Act shall
meet all of the following requirements:
(1) The application shall be in a form and medium
prescribed by the Department.
(2) The application shall provide all of the following
information:
(A) The name of the applicant and the address of
the principal place of business of the applicant and
the address of all locations and proposed locations of
the applicant in this State.
(B) The form of business organization of the
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applicant, including:
(i) a copy of its articles of incorporation
and amendments thereto and a certified copy of its
bylaws, if the applicant is a corporation;
(ii) a copy of its partnership agreement,
certified by a partner, if the applicant is a
partnership; or;
(iii) a copy of the documents that control its
organizational structure, certified by a managing
official, if the applicant is organized in some
other form.
(C) The name, the business and home address, and a
chronological summary of the business experience,
material litigation history, and felony convictions
over the preceding 10 years of:
(i) the proprietor, if the applicant is an
individual;
(ii) every partner, if the applicant is a
partnership;
(iii) each officer, director, and controlling,
person, if the applicant is a corporation; and
(iv) each person in a position to exercise
control over, or direction of, the business of the
applicant, regardless of the form of organization
of the applicant.
(D) Financial statements, not more than one year
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old, prepared in accordance with generally accepted
accounting principles and audited by a licensed public
accountant or certified public accountant showing the
financial condition of the applicant and an unaudited
balance sheet and statement of operation as of the
most recent quarterly report before the date of the
application, certified by the applicant or an officer
or partner thereof. If the applicant is a wholly owned
subsidiary or is eligible to file consolidated federal
income tax returns with its parent, however, unaudited
financial statements for the preceding year along with
the unaudited financial statements for the most recent
quarter may be submitted if accompanied by the audited
financial statements of the parent company for the
preceding year along with the unaudited financial
statement for the most recent quarter.
(E) Filings of the applicant with the Securities
and Exchange Commission or similar foreign
governmental entity (English translation), if any.
(F) A list of all other states in which the
applicant is licensed, registered, or the equivalent
and whether the license, registration, or equivalent
of the applicant for those purposes has ever been
withdrawn, refused, canceled, or suspended in any
other state, with full details.
(G) A sample of any contracts, disclosures, or
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terms of service applicable to its digital asset kiosk
operations.
(H) The name and business address of any digital
asset exchange or other person through which the
applicant intends to conduct any business regulated
under this Act.
(I) A surety bond as required by Section 70 of this
Act.
(J) A written statement that the applicant is in
full compliance with and agrees to continue to fully
comply with all State and federal statutes and
regulations relating to money laundering.
(K) All additional information the Secretary
considers necessary in order to determine whether to
issue the applicant a license under this Act.
(b) The application shall be accompanied by a
nonrefundable fee of $5,000 to cover the costs of application
review.
(c) With good cause, the Secretary may waive, in part, any
of the requirements of this Section.
Section 60. Refusal to issue registration.
(a) The Secretary may refuse to issue or a registration
if: (i) the application does not comply with this Act; (ii) the
proposed business operations do not comply with this Act;
(iii) the competence, experience, and integrity of the
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officers, directors, controlling persons, and proposed
management personnel, if the applicant is a corporation, or
the competence, experience, and integrity of the owners,
partners, and proposed management personnel, if the applicant
is a partnership or other entity however organized, indicate
that it is not in the interest of the public to permit the
applicant to be registered under this Act; or (iv)
registration is otherwise not in the best interest of the
public.
(b) The Secretary shall issue a formal written notice of
the denial of a license application within 30 days after the
decision to deny the application. The Secretary shall set
forth the specific reasons for the denial of the application
in the notice of denial and serve the applicant, either
personally or by certified mail. Service by certified mail
shall be deemed completed when the notice is deposited into
the U.S. Mail. An applicant whose application is denied by the
Secretary under this Section may submit a written request for
a hearing that shall include the particular reasons why the
applicant believes that the decision to deny the application
was incorrect, within 10 days after service of the notice of
the denial. If an applicant submits a timely request for a
hearing, the Secretary shall schedule a hearing after the
request for a hearing unless otherwise agreed to by the
parties. The Secretary shall conduct hearings pursuant to this
Section and in accordance with 38 Ill. Adm. Code 100, as
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amended or recodified.
Section 65. Renewal.
(a) A registration under this Act shall be renewed
annually.
(b) A registrant shall submit a renewal report, in a form
and in a medium prescribed by the Secretary by December 1 of
each year. The form requires any information deemed necessary
by the Secretary to review a renewal application. At a
minimum, the renewal report must state or contain a
description of each material change in information submitted
by the registration in its original registration application
or in its business operations which has not been reported to
the Secretary.
(c) The Secretary may grant an extension of the renewal
date.
Section 70. Surety bond.
(a) An applicant for a registration must provide, and a
registrant at all times must maintain, security consisting of
a surety bond in a form satisfactory to the Secretary. The bond
shall run to the State of Illinois for the benefit of any
claimant against the applicant or registrant with respect to
any operations regulated by this Act. A claimant damaged by a
breach of the conditions of a bond shall have a right to action
upon the bond for damages suffered thereby and may bring suit
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directly on the bond, or the Secretary may bring suit on behalf
of the claimant.
(b) The amount of the required security bond shall be the
greater of $100,000 or an amount equal to 100% of the monthly
dollar value of all digital asset kiosk transactions in this
State calculated for the most recently completed quarter, up
to a maximum of $2,000,000.
Section 75. Tangible net worth.
(a) A registrant under this Act shall maintain at all
times a tangible net worth of the greater of $100,000 or 3% of
total assets for the first $100,000,000, 2% of additional
assets for $100,000,000 to $1,000,000,000, and 0.5% of
additional assets for over $1,000,000,000.
(b) Notwithstanding subsection (a), the Secretary shall
have discretionary authority to exempt, in part or in whole,
from the requirements of this Section any applicant or
registrant.
Section 85. Enforcement generally.
(a) Upon written notice to a digital asset kiosk operator,
the Secretary may suspend or revoke any registration issued
pursuant to this Act if, in the notice, the Secretary makes a
finding of one or more of the following:
(1) that any fact or condition exists that, if it had
existed at the time of the original application for the
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registration, would have warranted the Secretary in
refusing originally to issue the registration; or
(2) that if a registrant is other than an individual,
any ultimate equitable owner, officer, director, or member
of the registration partnership, association, corporation,
or other entity has acted or failed to act in a way that
would be cause for suspending or revoking a registration
to that party as an individual; and
(3) any ground set forth in subsection (l).
(b) No registration shall be suspended or revoked, except
as provided in this Section, nor shall any digital asset kiosk
operator be fined without notice of the right to a hearing as
provided in this Section.
(c) The Secretary, on good cause shown that an emergency
exists, may suspend any registration for a period not
exceeding 180 days, pending investigation.
(d) No revocation, suspension, or surrender of any
registration shall impair or affect the obligation of any
preexisting lawful contract between the registrant and any
person.
(e) Every registration issued under this Act shall remain
in force and effect until the registration expires without
renewal, is surrendered, is revoked, or is suspended in
accordance with the provisions of this Act, but the Secretary
shall have authority to reinstate a suspended registration or
to issue a new registration to a digital asset kiosk operator
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whose registration has been revoked if no fact or condition
then exists which would have warranted the Secretary in
refusing originally to issue that registration under this Act.
(f) Whenever the Secretary revokes or suspends a
registration issued pursuant to this Act or fines a digital
asset kiosk operator under this Act, the Secretary shall
execute a written order to that effect. The Secretary shall
serve a copy of the order upon the digital asset kiosk
operator.
(g) If the Secretary finds any digital asset kiosk
operator in violation of the grounds set forth in subsection
(l), the Secretary may enter an order imposing one or more of
the following penalties:
(1) revocation of registration;
(2) suspension of a registration subject to
reinstatement upon satisfying all reasonable conditions
the Secretary may specify;
(3) placement of the digital asset kiosk operator or
applicant on probation for a period of time and subject to
all reasonable conditions as the Secretary may specify;
(4) issuance of a reprimand;
(5) imposition of a fine not to exceed $25,000 for
each count of separate offense; except that a fine may be
imposed that shall not exceed $75,000 for each separate
count of offense in violation of paragraph (2) or (14) of
subsection (l);
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(6) denial of a registration application; or
(7) restitution for the benefit of any person.
(h) The Secretary may issue a new registration to a
digital asset kiosk operator whose registration has been
revoked when facts or conditions which clearly would have
warranted the Secretary in refusing originally to issue the
registration no longer exist.
(i) For every order issued pursuant to this Section, the
Secretary shall serve the digital asset kiosk operator with
notice of the Secretary's action, including a statement of the
reasons for the actions, either personally or by certified
mail. Service by certified mail shall be deemed completed when
the notice is deposited in the U.S. mail.
(j) Any order issued pursuant to this Section shall take
effect upon service of the order unless the digital asset
kiosk operator requests a hearing, in writing, within 10 days
after the date of service. If a hearing is requested, the order
shall be stayed until a final administrative order is entered
except for an emergency revocation and suspension as set forth
subsection (c).
(1) If the digital asset kiosk operator requests a
hearing, the Secretary shall schedule a hearing within 90
days after the request for a hearing unless otherwise
agreed to by the parties.
(2) The hearing shall be held at the time and place
designated by the Secretary. The Secretary and any
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administrative law judge designated by the Secretary shall
have the power to administer oaths and affirmations,
subpoena witnesses and compel their attendance, take
evidence, and require the production of books, papers,
correspondence, and other records or information that the
Secretary or the Secretary's designated administrative law
judge considers relevant or material to the inquiry.
(k) The costs of administrative hearings conducted
pursuant to this Section shall be paid by the digital asset
kiosk operator.
(l) The following acts shall constitute grounds for which
the disciplinary actions specified in subsection (g) may be
taken:
(1) being convicted or found guilty, regardless of
pendency of an appeal, of a crime in any jurisdiction that
involves fraud, dishonest dealing, or any other act of
moral turpitude;
(2) fraud, misrepresentation, deceit, or negligence in
any relation to any transaction regulated under this Act;
(3) a material or intentional misstatement of fact on
an initial or renewal application;
(3.5) any fact or condition exists that, if it had
existed at the time of the original application for the
registration, would have warranted the Secretary in
refusing to originally issue the registration;
(4) insolvency or filing under any provision of the
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United States Bankruptcy Code as a debtor;
(5) failure to account or deliver to any person any
property, such as any money, fund, deposit, check, draft,
or other document or thing of value, that has come into a
digital asset kiosk operator's hands and that is not the
digital asset kiosk operator's property or that the
digital asset kiosk operator is not in law or equity
entitled to retain, under the circumstances and at the
time which has been agreed upon or is required by law, or,
in the absence of a fixed time, upon demand of the person
entitled to the accounting and delivery;
(6) failure to disburse funds in accordance with
agreements;
(7) having a registration, or the equivalent, to
practice any profession or occupation or operate any
business revoked, suspended, or otherwise acted against,
including the denial of licensure by a licensing authority
of this State or another State, territory, or country, for
fraud, dishonest dealing, or any other act of moral
turpitude;
(8) failure to comply with an order of the Secretary;
(9) engaging in activities regulated by this Act
without a current, active registration unless specifically
exempted by this Act;
(10) failure to pay in a timely manner any fee,
charge, or fine under this Act;
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(11) failure to maintain, preserve, and keep available
for examination all books, accounts, or other documents
required by the provisions of this Act;
(12) refusing, obstructing, evading, or unreasonably
delaying an investigation, information request, or
examination authorized under this Act, or refusing,
obstructing, evading, or unreasonably delaying compliance
with the Secretary's subpoena or subpoena duces tecum;
(13) failure to comply with or a violation of any
provision of this Act; and
(14) any unfair, deceptive, or abusive business
practice.
Section 90. Cease and desist order.
(a) The Secretary may issue a cease and desist order to any
digital asset kiosk operator doing business without the
required registration, when in the opinion of the Secretary
the digital asset kiosk operator is violating or is about to
violate any provision of this Act or requirement imposed in
writing by the Department as a condition of granting any
authorization permitted by this Act. The cease and desist
order permitted by this Section may be issued before a
hearing.
(b) The Secretary shall serve notice of the Secretary's
action, including, but not limited to, a statement of the
reasons for the action, either personally or by certified
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mail. Service by certified mail shall be deemed completed when
the notice is deposited in the U.S. Mail.
(c) Within 10 days after service of the cease and desist
order, the digital asset kiosk operator may request a hearing
in writing. The Secretary shall schedule a hearing within 90
days after the request for a hearing unless otherwise agreed
to by the parties.
(d) If it is determined that the Secretary had the
authority to issue the cease and desist order, the Secretary
may issue such orders as may be reasonably necessary to
correct, eliminate, or remedy the conduct.
(e) The powers vested in the Secretary by this Section are
in addition to any and all other powers and remedies vested in
the Secretary by law, and nothing in this Section shall be
construed as requiring that the Secretary shall employ the
power conferred in this subsection instead of or as a
condition precedent to the exercise of any other power or
remedy vested in the Secretary.
Section 95. Civil action. A claim of violation of Sections
25, 30, and 45 of this Act may be asserted in a civil action.
Additionally, a prevailing resident may be awarded reasonable
attorney's fees and court costs.
Section 100. Rulemaking.
(a) The Department may adopt rules to implement the
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provisions of this Act, including, but not limited to:
(1) rules in connection with the activities of digital
asset kiosk operators as may be necessary and appropriate
for the protection of persons in this State;
(2) rules as may be necessary and appropriate to
define improper or fraudulent business practices in
connection with the activities of digital asset kiosk
operators and digital asset kiosks;
(3) rules that define the terms used in this Act and as
may be necessary and appropriate to interpret and
implement the provisions of this Act; and
(4) rules as may be necessary for the implementation,
enforcement and administration of this Act.
(b) The Secretary is hereby authorized and empowered to
make specific rulings, demands, and findings that the
Secretary deems necessary for the proper conduct of operators.
Section 105. Appeal and review.
(a) The Department may, in accordance with the Illinois
Administrative Procedure Act, adopt rules to provide for
review within the Department of the Secretary's decisions
affecting the rights of persons under this Act. The review
shall provide for, at a minimum:
(1) appointment of a hearing officer;
(2) appropriate procedural rules, specific deadlines
for filings, and standards of evidence and of proof; and
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(3) provision for apportioning costs among parties to
the appeal.
(b) All final agency determinations of appeals to
decisions of the Secretary may be reviewed in accordance with
and under the provisions of the Administrative Review Law.
Appeals from all final orders and judgments entered by a court
in review of any final administrative decision of the
Secretary or of any final agency review of a decision of the
Secretary may be taken as in other civil cases.
(c) The Secretary shall conduct hearings pursuant to this
Section and in accordance with 38 Ill. Adm. Code 100, as
amended or recodified from time to time.
Section 110. Evasion. An agreement, contract, or
transaction that is structured to evade the scope of this Act
shall be deemed to fall within the scope of this Act.
Section 115. Injunction. The Secretary may, through the
Attorney General, maintain an action in the name of the people
of the State of Illinois and may apply for an injunction in the
Circuit Court to enjoin a person from violating this Act.
Section 120. Applicability. This Act governs any digital
asset kiosk located in this State.
Section 125. Exemptions.
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(a) This Act does not apply to the following persons:
(1) The United States; other states or political
subdivisions of another state; agencies or
instrumentalities of the federal government, another
state, or local government; or a foreign government or a
subdivision, department, agency, or instrumentality of a
foreign government.
(2) A federally insured depository institution.
(3) A credit union with member share accounts insured
by an insurer approved by the credit union's primary
financial regulatory agency. An out-of-State credit union
may not conduct any activity in this State that is not
authorized for a credit union chartered under the laws of
this State.
(b) Nothing in this Act grants persons described in this
subsection (a) the authority to engage in any activity not
otherwise granted under existing law.
(c) Notwithstanding any other provision of this Act, the
Department, by rule or order, may conditionally or
unconditionally exempt any person, or any class of person or
classes of persons, digital asset, or transaction from any
provision of this Act or any rule adopted pursuant to this Act,
to the extent that the exemption is necessary or appropriate,
in the public interest, and consistent with the protection of
residents.
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Section 800. If and only if Senate Bill 1797 of the 104th
General Assembly, as amended by House Amendment No. 1, becomes
law, then Sections 15, 20, 50, 55, 60, 65, 70, 75, 85, 90, 105,
115, 120, and 125 of this Act are repealed on the date that
Senate Bill 1797 of the 104th General Assembly becomes law.
Section 900. The State Finance Act is amended by adding
Section 5.1030 as follows:
(30 ILCS 105/5.1030 new)
Sec. 5.1030. The Digital Asset Kiosk Fund. If and only if
Senate Bill 1797 of the 104th General Assembly, as amended by
House Amendment No. 1, becomes law, this Section is repealed.
Section 997. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
Section 999. Effective date. This Act takes effect upon
becoming law.