California § 3503

§ 3503.

(a) (1) A covered person that has control of a digital financial asset for one or more persons shall at all times maintain in its control an amount of each type of digital financial asset sufficient to satisfy the aggregate entitlements of the persons to the type of digital financial asset. (2) If a covered person violates this subdivision, the property interests of the persons in the digital financial asset are pro rata property interests in the type of digital financial asset to which the persons are entitled without regard to the time the persons became entitled to the digital financial asset or the covered person obtained control of the digital financial asset. (b) A digital financial asset maintained for purposes of compliance with this section shall meet all of the following criteria: (1) The digital financial asset shall be held for the persons entitled to the digital financial asset. (2) The digital financial asset shall not be property of the covered person. (3) The digital financial asset shall not be subject to the claims of creditors of the covered person. (c) A covered person may comply with this section by including, and complying with, a provision in its contract with a resident that states all of the following: (1) That a digital financial asset controlled by the covered person on behalf of the resident will be treated as a financial asset under Division 8 (commencing with Section 8101) of the Commercial Code. (2) That the covered person is a securities intermediary under Division 8 (commencing with Section 8101) of the Commercial Code with respect to any digital financial assets under control of the covered person on behalf of the resident. (3) That the resident’s account or wallet provided by or through the covered person is a securities account under Division 8 (commencing with Section 8101) of the Commercial Code. (d) Even if commingled with other assets of the covered person, digital financial assets maintained for purposes of compliance with this section are deemed to be held in trust for the benefit of the customers of the covered persons’ digital financial asset business activity, in the event of bankruptcy or receivership of the covered person, or in the event of an action by a creditor against the covered person who is not a beneficiary of this statutory trust. Digital financial assets maintained for purposes of compliance with this section or eligible securities impressed with a trust pursuant to this subdivision shall not be subject to attachment, levy of execution, or sequestration by order of any court, except for a beneficiary of this statutory trust. (e) A covered person shall at all times own eligible securities, as described in subdivision (b) of Section 2082, having an aggregate market value computed in accordance with United States generally accepted accounting principles of not less than the aggregate amount of all of its outstanding United States dollar-denominated liabilities owed to its customers.