KRS 286.13-010: Definitions for subtitle. (Effective April 30, 2027)

As used in this subtitle, unless the context requires otherwise:

(1) "Affiliate" means a person that, either directly or indirectly through one (1) or more

intermediaries, controls, is controlled by, or is under common control with another

person;

(2) "Agent":

(a) Means a person authorized by written agreement and designated by a virtual

currency kiosk operator to engage in virtual currency kiosk business in this

state on behalf of the operator;

(b) Includes, as the context requires, a person that an applic ant proposes to

engage in virtual currency kiosk business in this state as an agent on behalf of

the applicant; and

(c) Does not include an employee of a virtual currency kiosk operator or

applicant;

(3) "Control" means one (1) or more of the following:

(a) The power to direct the management, operations, or policies of a person,

which power may be:

1. Direct or indirect; and

2. Obtained:

a. Through legal or beneficial ownership of voting power in the

person; or

b. Under a contract, arrangement, or understanding;

(b) The power to vote, directly or indirectly, at least twenty -five percent (25%) of

the outstanding voting shares or voting interes ts of a person or a person in

control of the person;

(c) The power to elect or appoint a majority of a person's executive officers,

managers, directors, trustees, or other persons exercising managerial authority

of a person or a person in control of the person;

(d) The power to exercise, directly or indirectly, a controlling influence over the

management or policies of a person or a person in control of the person; and

(e) Any other set of facts or circumstances, as determined by the commissioner

through promulgation of an administrative regulation in accordance with KRS

Chapter 13A, that constitutes control;

(4) "Director" means any of the following:

(a) A member of a corporation's board of directors;

(b) A manager of a limited liability company;

(c) A partner of a partnership; or

(d) A member of any other entity's governing body;

(5) "Executive officer" means:

(a) A president, chairperson of the executive committee, responsible individual,

or chief financial officer; or

(b) Any other natural person who perf orms similar functions for an applicant,

licensee, or agent;

(6) "Fiat currency" means a government-issued currency that is:

(a) Backed by the government's authority; and

(b) Not backed by a physical commodity;

(7) "Key shareholder" means any person, or gr oup of persons acting in concert, that is

the owner of twenty percent (20%) or more of any voting class of the stock of an

applicant, licensee, or agent;

(8) "Legal tender":

(a) Means a medium of exchange or unit of value, including the coin or paper

money of the United States, that is:

1. Issued by:

a. The United States; or

b. Another government; or

2. Recognized by the Commonwealth of Kentucky, as permitted under

Article 1, Section 10, of the Constitution of the United States; and

(b) Does not include any medium of exchange or unit of value authorized,

recognized, or adopted by a foreign government if the medium of exchange or

unit of value was a virtual currency before the government authorized,

recognized, or adopted the medium of exchange or unit of value;

(9) "License" means a license issued by the commissioner under this subtitle;

(10) "Licensee" means a person issued a license;

(11) "Material litigation":

(a) Means litigation that according to generally accepted accounting principles:

1. Is significant to the financial health of an applicant, licensee, or agent;

and

2. Would be required to be disclosed in the applicant's, licensee's, or

agent's annual audited f inancial statements, report to shareholders, or

similar records; and

(b) Includes any adjudication against an applicant, licensee, or agent by a federal

or state administrative or regulatory agency relating to a violation of the Bank

Secrecy Act, 31 U.S.C. secs. 5311 to 5332 and 31 C.F.R. pt. 103, regardless

of whether liability or fault has been admitted;

(12) "Responsible individual":

(a) Means a natural person who:

1. Is employed by a virtual currency kiosk operator; and

2. Has principal managerial autho rity over the virtual currency kiosk

operator's virtual currency kiosk business in this state; and

(b) Includes, as the context requires, a natural person who:

1. Is employed by an applicant; and

2. The applicant proposes to have principal managerial autho rity over its

virtual currency kiosk business in this state;

(13) "Virtual currency":

(a) Except as provided in paragraph (b) of this subsection, means a digital

representation of value that is:

1. Used as a:

a. Medium of exchange;

b. Unit of account; or

c. Store of value; and

2. Not legal tender, whether or not denominated in legal tender; and

(b) Does not include:

1. A transaction in which a merchant grants, as part of an affinity or

rewards program, value that cannot be taken from or exchanged with a

merchant for legal tender, bank credit, or virtual currency; or

2. A digital representation of value:

a. Issued by or on behalf of a publisher; and

b. Used solely within an online game, game platform, or family of

games:

i. Sold by the same publisher; or

ii. Offered on the same game platform;

(14) (a) "Virtual currency kiosk" means a physical electronic terminal acting as a

mechanical agent of a virtual currency kiosk operator to enable the operator to

facilitate the exchange of one (1) or more of the following:

1. Fiat currency for virtual currency;

2. Virtual currency for fiat currency; and

3. Virtual currency for other virtual currency.

(b) As used in this subsection, "facilitate" includes:

1. Connecting directly to a separ ate virtual currency exchanger that

performs the exchange; and

2. Drawing upon the virtual currency or fiat currency in the possession or

control of the virtual currency kiosk operator to perform the exchange;

(15) "Virtual currency kiosk charges" means all of the following:

(a) Fees and expenses charged to a virtual currency kiosk user; and

(b) The difference between the market price of virtual currency and the price of

the virtual currency charged to a virtual currency kiosk user;

(16) "Virtual currency k iosk operator" or "operator" means a person, including a

licensee, that engages in virtual currency kiosk business in this state;

(17) "Virtual currency kiosk transaction" means any transaction:

(a) Conducted or performed by electronic means via a virtual currency kiosk

located in this state; or

(b) Made at a virtual currency kiosk located in this state to purchase, sell, transfer,

or otherwise exchange virtual currency; and

(18) "Virtual currency kiosk user" or "user" means a person, other than a virtual

currency kiosk operator, that initiates, authorizes, completes, or engages in a virtual

currency kiosk transaction.