BATON ROUGE, La.—Louisiana has adopted a Virtual Currency Business Act.
In doing so it becomes the second state after New York to require certain operators of virtual currency businesses to obtain a virtual currency license in order to conduct business in the state, The National Law Review reported.
According to the Act, no one is permitted to engage in a “virtual currency business activity,” or hold itself out as being able to engage in a virtual currency business activity, with or on behalf of any “resident” of Louisiana, irrespective of where the person is located, unless the person is either licensed by the Louisiana Office of Financial Institutions (OFI) or exempt from such licensure.
“The process for obtaining a virtual currency license is fairly involved, and includes a lengthy application, a minimum net worth standard, payment of an application fee, posting a surety bond, and ongoing supervision by OFI, among other things. OFI is granted broad authority to write administrative rules and conduct enforcement activity as well,” The National Law Review explained.
How Term is Defined
For these purposes, “virtual currency” is defined in the Act as a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and that is not legal tender, whether or not denominated in legal tender.
The term does not, however, include either of the following: a transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for legal tender, bank credit, or virtual currency; or a digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform.