(a)When engaging in digital financial business activity with a resident, a covered person shall provide to a resident the disclosures required by subdivision (b) and any additional disclosure the department by rule determines reasonably necessary for the protection of residents. The department shall determine by rule the time and form required for disclosure. A disclosure required by this section shall be made separately from any other information provided by the covered person and in a clear and conspicuous manner in a record the resident may keep. A covered person may propose, for the department’s approval, alternate disclosures as more appropriate for its digital financial asset business activity with, or on behalf of,
residents.
(b)Before engaging in digital financial asset b
Free access — add to your briefcase to read the full text and ask questions with AI
(a)
When engaging in digital financial business activity with a resident, a covered person shall provide to a resident the disclosures required by subdivision (b) and any additional disclosure the department by rule determines reasonably necessary for the protection of residents. The department shall determine by rule the time and form required for disclosure. A disclosure required by this section shall be made separately from any other information provided by the covered person and in a clear and conspicuous manner in a record the resident may keep. A covered person may propose, for the department’s approval, alternate disclosures as more appropriate for its digital financial asset business activity with, or on behalf of,
residents.
(b)
Before engaging in digital financial asset business activity with a resident, a covered person shall disclose, to the extent applicable to the digital financial asset business activity the covered person will undertake with the resident, all of the following:
(1)
A schedule of fees and charges the covered person 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 provided by the covered person is covered by either of the following:
(A)
A form of insurance or other guarantee against loss by an agency of the
United States as follows:
(i)
Up to the full United States dollar equivalent of digital financial assets placed under the control of, or purchased from, the covered person as of the date of the placement or purchase, including the maximum amount provided by insurance under the Federal Deposit Insurance Corporation, National Credit Union Share Insurance Fund, or otherwise available from the Securities Investor Protection Corporation.
(ii)
If not provided at the full United States dollar equivalent of the digital financial asset placed under the control of or purchased from the covered person, the maximum amount of coverage for each resident expressed in the United States dollar equivalent of the digital financial asset.
(B)
(i)
Private insurance against theft or loss, including cybertheft or theft by other means.
(ii)
Upon request of a resident with whom a covered person engages in digital financial asset business activity, a covered person shall disclose the terms of the insurance policy to the resident in a manner that allows the resident to understand the specific insured risks that may result in partial coverage of the resident’s assets.
(3)
The irrevocability of a transfer or exchange and any exception to irrevocability.
(4)
A description of all of the following:
(A)
The covered person’s liability for an unauthorized, mistaken, or
accidental transfer or exchange.
(B)
The resident’s responsibility to provide notice to the covered person of an unauthorized, mistaken, or accidental transfer or exchange.
(C)
The basis for any recovery by the resident from the covered person in case of an unauthorized, mistaken, or accidental transfer or exchange.
(D)
General error resolution rights applicable to an unauthorized, mistaken, or accidental transfer or exchange.
(E)
The method for the resident to update the resident’s contact information with the covered person.
(5)
That the date or time when the transfer or exchange is made and
the resident’s account is debited may differ from the date or time when the resident initiates the instruction to make the transfer or exchange.
(6)
Whether the resident has a right to stop a preauthorized 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 resident’s right to receive a receipt, trade ticket, or other evidence of the transfer or exchange.
(8)
The resident’s right to at least 14 days’ prior notice of a change in the covered person’s fee schedule, other terms and conditions that have a material impact on digital financial asset business activity with the resident, or the policies applicable to the resident’s
account.
(9)
That no digital financial asset is currently recognized as legal tender by California or the United States.
(10)
(A)
A list of instances in the past 12 months when the covered person’s service was unavailable to 10,000 or more customers seeking to engage in digital financial asset business activity due to a service outage on the part of the covered person and the causes of each identified service outage.
(B)
As part of the disclosure required by this paragraph, the covered person may list any steps the covered person has taken to resolve underlying causes for those outages.
(c)
Except as otherwise provided in subdivision (d), at the conclusion
of a digital financial asset transaction with, or on behalf of, a resident, a covered person shall provide the resident a confirmation in a record which contains all of the following:
(1)
The name and contact information of the covered person, including the toll-free telephone number required under Section 3507.
(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 a digital financial asset to legal tender, bank credit, or other digital financial asset, as well as any indirect charges.
(d)
If a covered person discloses that it will provide a daily confirmation
in the initial disclosure under subdivision (c), the covered person may elect to provide a single, daily confirmation for all transactions with, or on behalf of, a resident on that day instead of a per transaction confirmation.