§ 6:1393 — Violations

Louisiana § 6:1393

• Jurisdiction: Louisiana
• Title 6: Banks and Banking

Text

§1393. Violations
A. The office may take an enforcement action against a licensee or person who is not
a licensee but is engaging in virtual currency business activity with, or on behalf of, a
resident in any of the following instances:
(1) The licensee or person violates any of the provisions of this Chapter or any rule
or regulation promulgated or any order, including but not limited to a cease and desist order
or subpoena, issued pursuant to this Chapter.
(2) The licensee or person violates any provision of a voluntary consent or
compliance agreement that has been entered into with the commissioner.
(3) The licensee or person, in the conduct of its virtual currency business activity
with, or on behalf of, a resident, engages in any of the following:
(a) An unsafe or unsound act or practice.
(b) An unfair or deceptive act or practice.
(c) Fraud or intentional misrepresentation.
(d) Another dishonest act.
(e) Misappropriation of legal tender, virtual currency, or other value held by a
fiduciary.
(4) The licensee or person does not cooperate substantially with an investigation by
the office, fails to pay a fee, or fails to submit a report or documentation.
(5) If any of the following occurs:
(a) The licensee or person becomes insolvent.
(b) The licensee or person makes a general assignment for the benefit of its creditors.
(c) The licensee or person becomes the debtor, alleged debtor, respondent, or person
in a similar capacity in a case or other proceeding under any bankruptcy, reorganization,
arrangement, readjustment, insolvency, receivership, dissolution, liquidation, or similar law
and does not obtain from the court, within a reasonable time, confirmation of a plan or
dismissal of the case or proceeding.
(d) The licensee or person applies for, or permits the appointment of, a receiver,
trustee, or other agent of a court for itself or for a substantial part of its assets.
(6) The licensee or person has knowingly provided or caused to be provided a
material misrepresentation to the commissioner, any false or fraudulent material fact, or any
false or fraudulent financial statement or has suppressed or withheld from the commissioner
any information which if submitted by the licensee would have resulted in a denial of the
license application.
(7) The licensee or person refuses to permit an examination by the commissioner of
the books and affairs or has refused or failed within a reasonable time to furnish any
information or make any report that may be required by the commissioner pursuant to the
provisions of this Chapter.
(8) The licensee or person fails to maintain records as required by the commissioner
after being given written notice to the last address of record and thirty days within which to
correct the failure. The commissioner may grant up to two thirty-day extensions within which
to correct the recordkeeping violation.
(9) The licensee or person continues in office any individual with power to direct the
management or policies of a person regulated by this Chapter, including but not limited to
any officer, director, or manager, if such individual is convicted of, pleads guilty to, or is
found guilty after a plea of nolo contendere of any felony and has been adjudicated guilty in
any state, federal, foreign, or military court.
(10) The licensee or person violates any provision of a regulatory or prohibitory
statute by the government agency responsible for determining such violations.
(11) The licensee or person misrepresents material facts or makes a false promise
likely to influence, persuade, or induce a resident to engage in virtual currency business
activity.
(12) The licensee or person misrepresents or conceals a material fact, term, or
condition of a transaction to which he is a party pertinent to a resident to engage in virtual
currency business activity.
(13) The licensee or person knowingly engages in any transaction, practice, or course
of business which perpetrates a fraud upon any person in connection with engaging in virtual
currency business activity.
(14) The licensee or person fails to exchange, transfer, or store, without just cause,
any funds in accordance with any agreement connected with a virtual currency business
activity transaction.
(15) The licensee or person fails to account for or deliver to any person any assets
obtained in connection with a virtual currency business activity transaction, including but not
limited to legal tender, virtual currency, precious metals, and electronic certificates.
(16) The licensee or person fails to pay any fee, civil money penalty, cost, or
assessment imposed pursuant to this Chapter or by any rule or regulation promulgated in
accordance with this Chapter.
(17) The licensee or person violates the written restrictions or conditions under
which the license was issued.
(18) The licensee or person fails, after notice and without lawful excuse, to obey any
order or subpoena issued by the commissioner.
(19) The commissioner discovers any fact or condition currently exists that, if it had
existed at the time of the original application for licensure, would have warranted the denial
of the application.
B.(1) Notwithstanding any other law to the contrary, and in addition to any other
authority conferred upon the commissioner by any other provision of law, the commissioner
may, upon discovery, order an immediate suspension of the license of any person licensed
pursuant to this Chapter who does any of the following:
(a) Fails to maintain a surety bond or fails to meet the tangible net worth
requirements in any manner as provided for pursuant to R.S. 6:1386.
(b) Commits material violations pursuant to this Chapter such that, in the opinion
of the commissioner, the public safety and welfare demand that emergency action be taken.
(c) Submits a payment of any fee for any application, notification, examination,
investigation, late fee, or penalty that is returned, declined, denied, or otherwise not paid in
full for any reason.
(d) Is convicted of a felony that would have prohibited the issuance or renewal of the
license.
(e) Has his license to engage in virtual currency business activities suspended or
revoked in another jurisdiction.
(2) A person whose license is suspended pursuant to this Subsection shall have thirty
days from the date of the order to request a hearing in accordance with the Administrative
Procedure Act. Failure to timely request a hearing shall constitute a waiver of all hearing
rights regarding the suspension.
C. In addition to any other authority conferred upon the commissioner by this
Chapter or this Title, the commissioner may issue a cease and desist order, order refunds of
any unauthorized portion of any fee, or charge any person who collects in violation of this
Chapter and may impose a civil money penalty as determined by the commissioner by rule
upon any person who is found to have violated any of the provisions of this Chapter or any
rule or regulation promulgated in accordance with this Chapter. Each separate violation shall
subject the person to a civil money penalty, and each day the person acts without complying
with the provisions of this Chapter, or rules or regulations promulgated in accordance with
this Chapter, shall constitute a separate violation.
D. The violations listed in this Subsection are nonexclusive and are in addition to
and exist independent of any violations set forth in other provisions of this Chapter. Failure
to comply with any provisions set forth in this Chapter may serve as a basis for any
enforcement or other action authorized to the commissioner under this Title. It shall be a
violation of this Chapter for a person engaged in virtual currency business activity pursuant
to this Chapter to do any of the following:
(1) Directly or indirectly employ any scheme, device, or artifice to defraud or
mislead any resident, when such person knew or should have known that such scheme,
device, or artifice was defrauding or misleading.
(2) Engage in any unfair or deceptive practice toward any resident.
(3) Fail to comply with this Chapter, any rules or regulations promulgated pursuant
to this Chapter, the laws of this state, or federal law, including the rules and regulations
issued thereunder, applicable to any virtual currency business activity.
(4) Negligently make any false statement, or knowingly and willfully make any
omission of material fact, in connection with any information or reports filed with a state or
federal government agency or the NMLS or in connection with any investigation conducted
by the commissioner or any other state or federal government agency.
(5) Fail to truthfully account for any assets in connection with any virtual currency
business activity with, or on behalf of, a resident.
E. The commissioner may report apparent violations to other appropriate state and
federal regulators, the NMLS, federal law enforcement agencies, the attorney general, or the
district attorney of the appropriate parish, who may institute any proceeding as he considers
appropriate.
F. Advisory opinions and interpretations of the office shall not be considered rules
requiring compliance with the rulemaking process of the Administrative Procedure Act. The
commissioner and the employees of the office shall have no liability to any person with
respect to an advisory opinion or interpretation issued in connection with this Chapter.
G. All of the grounds for enforcement action listed in Subsection A of this Section
are violations of this Chapter and may serve as the basis for any other enforcement action
provided to the commissioner by this Title.
H. The commissioner may share information about any person who is licensed or
required to be licensed pursuant to this Chapter with any state or federal agency also having
jurisdiction over the virtual currency business activities of that person.
I. Any licensee whose license issued pursuant to this Chapter has been revoked for
any reason may not reapply for a license until at least five years have elapsed from the date
of the order of revocation, unless the commissioner, in his sole discretion, prescribes an
earlier or later date. For purposes of this Subsection, the order is considered to be the
commissioner's notification of revocation of the license. For the purpose of this Subsection,
the term "licensee" shall include the licensee, owners of ten percent or more, and its members
if the licensee is a limited liability company, its partners if the licensee is a partnership, its
officers and directors if the licensee is a corporation, and any other person determined by the
commissioner, in his sole discretion, to be closely related to the licensee.
NOTE: The provisions of Acts 2023, No. 331, will terminate on July 1,
2027. See Acts 2024, No. 700.
NOTE: The provisions of Acts 2023, No. 331, have no termination date. See
Acts 2024, No. 159.

Legislative History

Acts 2020, No. 341, §1; Acts 2023, No. 331, §1, eff. June 13, 2023; Acts 2024, No. 159, §1; Acts 2024, No. 700, §2.