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SECOND REGULAR SESSION
SENATE BILL NO. 1177
103RD GENERAL ASSEMBLY
INTRODUCED BY SENATOR FITZWATER.
5432S.01I KRISTINA MARTIN, Secretary
AN ACT
To amend chapter 409, RSMo, by adding thereto two new sections relating to the regulation of
digital assets.
Be it enacted by the General Assembly of the State of Missouri, as follows:
Section A. Chapter 409, RSMo, is amended by adding thereto 1
two new sections, to be known as sections 409.450 and 409.455, 2
to read as follows:3
409.450. 1. For purposes of this section and section 1
409.455, the following terms mean: 2
(1) "Bank", any entity subject to chapter 362; 3
(2) "Commissioner", Missouri commissioner of 4
securities; 5
(3) "Custodial services", the safekeeping, servicing, 6
and management of customer currency and digital assets. 7
This term includes the exercise of fiduciary and trust 8
powers involving the exercise of discretion, including 9
transactions under subdivision (5) of this subsection; 10
(4) "Digital asset", a representation of economic, 11
proprietary, or access rights that is stored in a computer 12
readable format and is either a digital consumer asset, 13
digital security, or virtual currency; 14
(5) "Digital consumer asset", a digital asset that is 15
used or bought primarily for consumptive, personal, or 16
household purposes and includes: 17
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(a) An open blockchain token constituting intangible 18
personal property as otherwise provided by law; and 19
(b) Any other digital asset which does not fall within 20
subdivisions (5) and (9) of this subsection; 21
(6) "Digital security", a digital asset which 22
constitutes a security, as defined in section 409.1-102, but 23
shall exclude digital consumer assets and virtual currency; 24
(7) "Private key", a unique element of cryptographic 25
data, or any substantially similar analogue, which is: 26
(a) Held by a person; 27
(b) Paired with a unique, publicly available element 28
of cryptographic data; and 29
(c) Associated with an algorithm that is necessary to 30
carry out an encryption or decryption required to execute a 31
transaction; 32
(8) "Secretary", the secretary of state; 33
(9) "Virtual currency", a digital asset that is: 34
(a) Used as a medium of exchange, unit of account, or 35
store of value; and 36
(b) Not recognized as legal tender by the United 37
States government. 38
2. (1) Digital assets are classified in the following 39
manner: 40
(a) Digital consumer assets are intangible personal 41
property and shall be considered general intangibles, as 42
defined in section 400.9-102, only for the purposes of 43
article 9 of chapter 400; 44
(b) Digital securities are intangible personal 45
property and shall be considered securities, as defined in 46
section 400.8-102, and investment property, as defined in 47
section 400.9-102, only for the purposes of articles 8 and 9 48
of chapter 400; 49
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(c) Virtual currency is intangible personal property 50
and shall be considered money, notwithstanding any provision 51
of law to the contrary, only for the purposes of article 9 52
of chapter 400. 53
(2) Consistent with section 400.8-102, a digital asset 54
may be treated as a financial asset under that section, 55
pursuant to an agreement with the owner of the digital 56
asset. If treated as a financial asset, the digital asset 57
shall remain intangible personal property. 58
(3) A bank providing custodial services shall be 59
considered to meet the requirements of section 400.8-102. 60
(4) Classification of digital assets under this 61
subsection shall be construed in a manner to give the 62
greatest effect to this section, but shall not be construed 63
to apply to any other asset. 64
3. (1) Notwithstanding the financing statement 65
requirement specified by section 400.9-310 as otherwise 66
applied to general intangibles or any other provision of 67
law, perfection of a security interest in virtual currency 68
or digital securities may be achieved through possession or 69
control, as applicable to the asset. A security interest 70
held by a secured party having possession or control, as 71
applicable, of virtual currency or digital securities has 72
priority over a security interest held by a secured party 73
that does not have possession or control, as applicable, of 74
virtual currency or digital securities. Other provisions of 75
law relating to priority of security interests, including 76
priority of control over delivery, shall remain applicable. 77
(2) Before a secured party may take possession or 78
control under this section, the secured party shall enter 79
into a security agreement with the debtor. The security 80
agreement may set forth the terms under which a secured 81
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party may pledge its security interest as collateral for 82
another transaction. Consistent with section 400.9-201, the 83
security agreement shall be effective according to its terms 84
between parties, against purchasers of collateral, and 85
against creditors. 86
(3) If a debtor is located in this state, a secured 87
party may file a financing statement with the commissioner 88
to perfect a security interest in digital consumer assets or 89
digital securities, including to perfect a security interest 90
in proceeds pursuant to section 400.9-315. 91
(4) Notwithstanding any other provision of law, 92
including article 9 of chapter 400, a transferee takes a 93
digital asset free of any security interest two years after 94
the transferee takes the asset for value and does not have 95
actual notice of an adverse claim. This subdivision only 96
applies to a security interest perfected by filing. 97
(5) For purposes of this subsection, the following 98
terms mean: 99
(a) "Control", 100
a. Includes the following: 101
(i) A secured party, or an agent, custodian, 102
fiduciary, or trustee of the party, has complied with 103
section 400.8-106, including by means of a private key or 104
the use of a multi-signature arrangement exclusive to the 105
secured party or any substantially similar analogue; 106
(ii) Use of a smart contract created by a secured 107
party to comply with section 400.8-106. As used in this 108
subparagraph, "smart contract" means a transaction conducted 109
or performed, in whole or in part, by electronic means or 110
electronic records, in which the acts or records of one or 111
both parties are not reviewed by an individual in the 112
ordinary course in forming a contract, performing under an 113
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existing contract or fulfilling an obligation required by 114
the transaction, or any substantially similar analogue, 115
which is comprised of code, script, or programming language 116
that executes the terms of an agreement, and which may 117
include taking custody of and transferring an asset, or 118
issuing executable instructions for these actions, based on 119
the occurrence or nonoccurrence of specified conditions; 120
b. This definition shall apply to article 9 of chapter 121
400; 122
(b) "Multi-signature arrangement", a system of access 123
control relating to a digital asset for the purposes of 124
preventing unauthorized transactions relating to the asset, 125
in which two or more private keys are required to conduct a 126
transaction, or any substantially similar analogue; 127
(c) "Possession", the ability to exclude others from 128
the use of property, and includes use of a private key, a 129
multi-signature arrangement exclusive to the secured party 130
or a smart contract, as defined in this subdivision, or any 131
substantially similar analogue. "Possession" also includes 132
delivery of certificated digital securities, consistent with 133
section 400.8-301. This definition shall apply to article 9 134
of chapter 400. 135
(6) Perfection by possession creates a possessory 136
security interest under subdivision (2) of section 400.9-301 137
in virtual currency or certificated digital securities, 138
based on the possessory nature of a private key or any 139
substantially similar analogue, which may be tangible or 140
electronic. 141
(7) For purposes of article 9 of chapter 400 and this 142
subsection, if collateral is required to be "located in a 143
jurisdiction", a digital asset is located in this state if 144
the asset is possessed or controlled by a Missouri bank, or 145
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other custodian, the debtor or secured party is physically 146
located in this state, or the debtor or secured party is 147
incorporated or organized in Missouri, based on the 148
following factors: 149
(a) Whether a security agreement typically 150
accompanying a possessory security interest or other secured 151
transaction exists, consistent with subsection (a) of 152
section 400.9-201, including an agreement describing the 153
possessory nature of a private key or any substantially 154
similar analogue; 155
(b) Choice of law in a security agreement, evidencing 156
the intent and understanding of the parties relating to a 157
transaction, including waivers of litigation in 158
jurisdictions other than Missouri and judicial economy; and 159
(c) The relative clarity of the laws of other 160
jurisdictions relating to a digital asset, consequences 161
relating to unknown liens in those jurisdictions, and the 162
ability of a court to exercise jurisdiction over a 163
particular digital asset. 164
4. (1) A bank may provide custodial services for 165
digital assets consistent with this subsection upon 166
providing sixty days written notice to the commissioner. If 167
a bank elects to provide custodial services for digital 168
assets, it shall comply with all provisions of this 169
subsection. 170
(2) A bank may serve as a qualified custodian, as 171
specified by the United States securities and exchange 172
commission in 17 C.F.R. Section 275.206(4)-2, or as a 173
custodian authorized by the United States commodity futures 174
trading commission or other law. In performing custodial 175
services under this subsection, a bank shall: 176
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(a) Implement all accounting, account statement, 177
internal control, notice, and other standards specified by 178
applicable state or federal law and rules for custodial 179
services; 180
(b) Maintain information technology best practices 181
relating to digital assets held in custody. The 182
commissioner may specify required best practices by rule; 183
(c) Fully comply with applicable federal anti-money 184
laundering, customer identification, and beneficial 185
ownership requirements; and 186
(d) Take other actions necessary to carry out this 187
subsection, which may include exercising fiduciary powers 188
similar to those permitted to national banks and ensuring 189
compliance with federal law governing digital assets 190
classified as commodities. 191
(3) A bank providing custodial services shall conform 192
to the audit, accounting, and related requirements specified 193
by the commissioner and applicable law, which may include 194
entering into an agreement with an independent public 195
accountant to conduct an examination conforming to the 196
requirements of 17 C.F.R. Section 275.206(4)-2(a)(4) and 197
(6), at the cost of the bank. An accountant shall transmit 198
the results of any examination to the commissioner within 199
one hundred twenty days of the examination and may file the 200
results with other regulatory agencies as their rules may 201
provide. Material discrepancies in an examination shall be 202
reported to the commissioner within one day. The 203
commissioner shall review examination results upon receipt 204
within a reasonable time. 205
(4) Digital assets held in custody under this 206
subsection are not liabilities or assets of the bank. A 207
bank, or a subsidiary, may register as an investment 208
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adviser, investment company or broker dealer, as necessary. 209
A bank shall maintain possession or control, as applicable, 210
over a digital asset while in custody. A customer shall 211
elect, pursuant to a written agreement with the bank, one of 212
the following relationships for each digital asset held in 213
custody: 214
(a) Custody under a bailment as a nonfungible or 215
fungible asset. Assets held under this paragraph shall be 216
strictly segregated from other assets; or 217
(b) Custody pursuant to subdivision (5) of this 218
subsection. 219
(5) If a customer makes an election under paragraph 220
(b) of subdivision (4) of this subsection, the bank may, 221
based only on customer instructions, undertake transactions 222
with the digital asset. A bank is deemed to maintain 223
possession or control pursuant to subdivision (4) of this 224
subsection by entering into an agreement with the 225
counterparty to a transaction which contains a time for 226
return of the asset and other customary terms in securities 227
or commodities transactions. The bank shall not be liable 228
for any loss suffered with respect to a transaction under 229
this subsection, except for liability consistent with 230
fiduciary and trust powers. 231
(6) A bank and a customer shall agree in writing 232
regarding the source code version the bank will use for each 233
digital asset, and the treatment of each asset under chapter 234
400, if necessary. Any ambiguity under this subdivision 235
shall be resolved in favor of the customer. 236
(7) A bank shall provide clear, written notice to each 237
customer, and require written acknowledgement, of the 238
following: 239
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(a) Prior to the implementation of any updates, 240
material source code updates relating to digital assets held 241
in custody, except in emergencies which may include security 242
vulnerabilities; 243
(b) The heightened risk of loss from transactions 244
under subdivision (5) of this subsection; 245
(c) That some risk of loss as a pro rata creditor 246
exists as the result of custody as a fungible asset or 247
custody under paragraph (b) of subdivision (4) of this 248
subsection; 249
(d) That custody under paragraph (b) of subdivision 250
(4) of this subsection may not result in the digital assets 251
of the customer being strictly segregated from other 252
customer assets; and 253
(e) That the bank is not liable for losses suffered 254
under subdivision (5) of this subsection, except for 255
liability consistent with fiduciary and trust powers. 256
(8) A bank and a customer shall agree in writing to a 257
time period within which the bank must return a digital 258
asset held in custody under this section. If a customer 259
makes an election under paragraph (b) of subdivision (4) of 260
this subsection, the bank and the customer may also agree in 261
writing to the form in which the digital asset shall be 262
returned. 263
(9) All ancillary or subsidiary proceeds relating to 264
digital assets held in custody under this section shall 265
accrue to the benefit of the customer, except as specified 266
by a written agreement with the customer. The bank may 267
elect not to collect certain ancillary or subsidiary 268
proceeds, as long as the election is disclosed in writing. 269
A customer who makes an election under paragraph (b) of 270
subdivision (4) of this subsection may withdraw the digital 271
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asset in a form that permits the collection of the ancillary 272
or subsidiary proceeds. 273
(10) A bank shall not authorize or permit 274
rehypothecation of digital assets under this subsection. 275
The bank shall not engage in any activity to use or exercise 276
discretionary authority relating to a digital asset except 277
based on customer instructions. 278
(11) A bank shall not take any action under this 279
section which would likely impair the solvency or the safety 280
and soundness of the bank, as determined by the commissioner 281
after considering the nature of custodial services customary 282
in the banking industry. 283
(12) The commissioner may adopt rules to implement 284
this section. Any rule or portion of a rule, as that term 285
is defined in section 536.010, that is created under the 286
authority delegated in this section shall become effective 287
only if it complies with and is subject to all of the 288
provisions of chapter 536 and, if applicable, section 289
536.028. This section and chapter 536 are nonseverable and 290
if any of the powers vested with the general assembly 291
pursuant to chapter 536 to review, to delay the effective 292
date, or to disapprove and annul a rule are subsequently 293
held unconstitutional, then the grant of rulemaking 294
authority and any rule proposed or adopted after August 28, 295
2026, shall be invalid and void. 296
(13) A bank may provide custodial services for 297
stablecoin reserves, provided those custodial services are 298
consistent with this section and the rules and regulations 299
of the commissioner. 300
(14) A supervised trust company that is chartered in 301
this state may provide all the services provided in this 302
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section if it complies with the provisions of this section 303
and the rules and regulations of the commissioner. 304
5. Except as otherwise provided by law, the courts of 305
Missouri shall have jurisdiction to hear claims in both law 306
and equity relating to digital assets, including those 307
arising from this section and chapter 400. 308
409.455. 1. (1) The lawful owner of any digital 1
asset or the lawful owner's agent may register the digital 2
asset with the secretary in accordance with this section. 3
Digital assets registered with the secretary shall be deemed 4
to be located within the state for purposes of all laws and 5
regulations of this state, or any applicable federal laws 6
not in conflict with this section or section 409.450, which 7
may impact ownership rights of the digital asset or require 8
transfer of the digital asset. 9
(2) Following approval of an application for 10
registration of a digital asset, the secretary shall provide 11
a registration certificate cryptographically signed by the 12
secretary for each registered digital asset that may be 13
attached to or otherwise associated with the digital asset. 14
(3) Nothing in this section or section 409.450 shall 15
be construed to confer any ownership, property or other 16
rights related to digital assets beyond those specifically 17
granted in such sections. 18
2. (1) Subject to the limitations set forth in this 19
section, any person may submit an application to the 20
secretary in the form and containing information as 21
prescribed by the secretary, for registration of a digital 22
asset. The application shall contain, at minimum, the 23
following information: 24
(a) The name and address of the person applying for 25
registration; 26
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(b) The nature of the digital asset and sufficient 27
information to identify the digital asset; 28
(c) A statement that the applicant is the lawful owner 29
of the digital asset or the lawful owner's agent and that to 30
the knowledge of the applicant no other person has a 31
current, valid registration of the digital asset either in 32
this state or in any other jurisdiction; and 33
(d) Cryptographic proof that the lawful owner has 34
control of the digital asset at the time of application. 35
(2) The application shall be signed and verified by 36
oath, affirmation, or declaration, under penalty of perjury, 37
by the applicant. 38
(3) The application for registration shall be 39
accompanied by a registration fee prescribed in subsection 8 40
of this section, which registration fee shall not exceed 41
five hundred dollars and shall be payable to the secretary. 42
(4) The applicant shall be a resident of this state, 43
if the applicant is a natural person. In the case of a 44
business entity, the applicant shall be incorporated or 45
organized in this state. 46
3. Upon the filing of a complete application for 47
registration and payment of the registration fee, the 48
application shall be deemed approved and the digital asset 49
registered pursuant to this section unless the secretary 50
causes the application to be examined for conformity with 51
this section subject to the following: 52
(1) The applicant shall provide any additional 53
information requested by the secretary and may make or 54
authorize the secretary to make necessary amendments to the 55
application as may be reasonably requested by the secretary 56
or deemed by the applicant to be advisable to respond to any 57
rejection or objection to the application; 58
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(2) The secretary may revise the application with 59
agreement of the applicant or may require the applicant to 60
submit a revised application; 61
(3) If the applicant is found not to meet the 62
registration requirements, the secretary shall advise the 63
applicant of the reasons. The applicant shall have a 64
reasonable period of time specified by the secretary in 65
which to reply or to amend the application, in which event 66
the application shall be reexamined. This procedure may be 67
repeated until: 68
(a) The secretary finally refuses registration of the 69
digital asset; or 70
(b) The applicant fails to reply or amend within the 71
specified period, whereupon the application shall be deemed 72
to have been abandoned. 73
4. (1) Registration of a digital asset is effective 74
for a term of five years from the date of registration. 75
Upon application filed within six months prior to the 76
expiration of the registration term and in a manner 77
complying with the requirements of the secretary, the 78
registration may be renewed for a term of five years from 79
the end of the expiring term. The renewal fee shall be set 80
in accordance with subsection 8 of this section, but shall 81
not exceed two hundred fifty dollars and shall be submitted 82
with the application for renewal of the registration. 83
(2) A digital asset registration may be renewed for 84
successive periods of five years under this section. 85
5. The secretary shall keep for public examination a 86
record of all registered digital assets under this section. 87
6. A digital asset shall no longer be deemed 88
registered and the secretary shall cancel from the register: 89
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(1) Any registration upon a voluntary request for 90
cancellation thereof from the lawful owner of the digital 91
asset or his agent and payment of a fee set in accordance 92
with subsection 8 of this section, but not to exceed thirty 93
dollars; 94
(2) Any registration that is not renewed under this 95
section; 96
(3) Any registration if a court of competent 97
jurisdiction finds: 98
(a) That the registration was granted improperly; or 99
(b) That the registration was obtained fraudulently; 100
(4) Any registration when a court of competent 101
jurisdiction orders cancellation of a registration on any 102
ground. 103
7. Any person, whether on his or her own behalf or on 104
behalf of any other person, files or registers any digital 105
asset in the office of the secretary under the provisions of 106
this section by knowingly making any false or fraudulent 107
representation or declaration, orally or in writing, or by 108
any other means, shall be liable to pay all damages 109
sustained in consequence of the filing or registration, to 110
be recovered by or on behalf of the injured party in any 111
court of competent jurisdiction. 112
8. (1) The secretary shall have all powers reasonably 113
necessary to perform the duties required by this section 114
including the promulgation of rules and regulations 115
necessary to carry out the purposes of this article. Any 116
rule or portion of a rule, as that term is defined in 117
section 536.010, that is created under the authority 118
delegated in this section shall become effective only if it 119
complies with and is subject to all of the provisions of 120
chapter 536 and, if applicable, section 536.028. This 121
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section and chapter 536 are nonseverable and if any of the 122
powers vested with the general assembly pursuant to chapter 123
536 to review, to delay the effective date, or to disapprove 124
and annul a rule are subsequently held unconstitutional, 125
then the grant of rulemaking authority and any rule proposed 126
or adopted after August 28, 2026, shall be invalid and void. 127
(2) The secretary shall set and collect registration, 128
service, and copying fees to recover the costs of providing 129
these services and administering this section. Fees shall 130
not exceed the costs of providing these services and 131
administering this section. 132
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