S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  938--A
                                                         Cal. No. 364
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 11, 2023
                                ___________
 
 Introduced  by  M.  of  A.  VANEL,  OTIS,  BLUMENCRANZ  -- read once and
   referred to the Committee on Science and Technology  --  reported  and
   referred  to the Committee on Codes -- recommitted to the Committee on
   Codes in accordance with Assembly Rule 3,  sec.  2  --  reported  from
   committee, advanced to a third reading, amended and ordered reprinted,
   retaining its place on the order of third reading
 
 AN  ACT  to  amend  the financial services law, in relation to requiring
   certain disclosures in advertisements involving virtual tokens
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  financial  services  law  is amended by adding a new
 section 410 to read as follows:
   § 410. RESTRICTIONS CONCERNING ADVERTISING.  (A) NO PERSON  SHALL,  IN
 ANY  MANNER,  ADVERTISE,  PRINT, DISPLAY, PUBLISH, DISTRIBUTE, OR BROAD-
 CAST,  OR  CAUSE  OR  PERMIT  TO  BE  ADVERTISED,  PRINTED,   DISPLAYED,
 PUBLISHED,  DISTRIBUTED, OR BROADCASTED, ANY STATEMENT OR REPRESENTATION
 WITH REGARD TO ANY VIRTUAL TOKEN FOR  CONSIDERATION  WITHOUT  DISCLOSING
 THE  AMOUNT  OF  CONSIDERATION,  WHETHER  PAST OR PROSPECTIVE, DIRECT OR
 INDIRECT, AND THE NATURE THEREOF.
   (B) NO  PERSON  SHALL,  IN  ANY  MANNER,  ADVERTISE,  PRINT,  DISPLAY,
 PUBLISH,  DISTRIBUTE, OR BROADCAST, OR CAUSE OR PERMIT TO BE ADVERTISED,
 PRINTED, DISPLAYED, PUBLISHED, DISTRIBUTED, OR BROADCASTED,  ANY  STATE-
 MENT  OR REPRESENTATION WITH REGARD TO ANY VIRTUAL TOKEN OR OTHER FINAN-
 CIAL PRODUCT OR SERVICE IF SUCH STATEMENT OR REPRESENTATION IS,  IN  ANY
 MANNER, FALSE, MISLEADING OR DECEPTIVE.
   (C) FOR THE PURPOSES OF THIS SECTION AND WITHOUT LIMITING SUBDIVISIONS
 (A)  AND  (B)  OF  THIS  SECTION, A STATEMENT OR REPRESENTATION SHALL BE
 FALSE, MISLEADING AND DECEPTIVE IF IT STATES  OR  IMPLIES,  DIRECTLY  OR
 INDIRECTLY,  THAT  A PERSON IS AUTHORIZED LEGALLY TO OFFER OR PROVIDE IN
 NEW YORK STATE OR TO NEW YORK STATE RESIDENTS A VIRTUAL TOKEN  OR  OTHER
 FINANCIAL PRODUCT OR SERVICE, AND SUCH PERSON IS NOT SO AUTHORIZED.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD01643-03-4
 A. 938--A                           2
 
   (D)  FOR  THE PURPOSES OF THIS SECTION, "VIRTUAL TOKEN" SHALL MEAN ANY
 INTERCHANGEABLE OR NON-INTERCHANGEABLE UNIT OF DATA THAT  IS  STORED  ON
 ANY  BLOCKCHAIN  LEDGER  WHICH  SHALL INCLUDE, AMONG OTHER DIGITAL UNITS
 THAT THE SUPERINTENDENT DETERMINES TO BE VIRTUAL  TOKENS  IN  ACCORDANCE
 WITH  THIS  DEFINITION,  CRYPTOCURRENCIES,  VIRTUAL  CURRENCIES, DIGITAL
 ASSETS AND DIGITAL TOKENS, WHETHER FUNGIBLE  OR  NON-FUNGIBLE.  "VIRTUAL
 TOKEN" SHALL NOT BE CONSTRUED TO INCLUDE ANY OF THE FOLLOWING:
   (A) DIGITAL UNITS THAT:
   (I) ARE USED SOLELY WITHIN ONLINE GAMING PLATFORMS;
   (II)  HAVE  NO  MARKET  OR  APPLICATION  OUTSIDE OF THOSE GAMING PLAT-
 FORMS;
   (III) CANNOT BE CONVERTED INTO, OR  REDEEMED  FOR,  FIAT  CURRENCY  OR
 VIRTUAL CURRENCY; AND
   (IV)  MAY  OR  MAY  NOT  BE REDEEMABLE FOR REAL-WORLD GOODS, SERVICES,
 DISCOUNTS, OR PURCHASES;
   (B) DIGITAL UNITS  THAT  CAN  BE  REDEEMED  FOR  GOODS,  SERVICES,  OR
 PURCHASES  AS  PART  OF  A CUSTOMER AFFINITY OR REWARDS PROGRAM WITH THE
 ISSUER AND/OR OTHER DESIGNATED MERCHANTS OR CAN BE REDEEMED FOR  DIGITAL
 UNITS  IN  ANOTHER  CUSTOMER  AFFINITY OR REWARDS PROGRAM, BUT CANNOT BE
 CONVERTED INTO, OR REDEEMED FOR, FIAT CURRENCY OR OTHER VIRTUAL  CURREN-
 CY; OR
   (C) DIGITAL UNITS USED AS PART OF PREPAID CARDS.
   § 2. This act shall take effect immediately.