KRS 286.13-075: Agents -- Written contract -- Duties of agents -- Funds constitute trust

funds of operator -- Report of loss of funds. (Effective April 30, 2027)

(1) Virtual currency kiosk operators desiring to engage in virtual currency kiosk

business through agents shall authorize each agent to operate pursuant to an express

written contract, which shall include the following provisions:

(a) That the operator designates the person as its agent with authority to engage in

virtual currency kiosk business on b ehalf of the operator as authorized under

this subtitle;

(b) That the agent shall operate in full compliance with this subtitle,

administrative regulations promulgated under this subtitle, and any order

issued by the commissioner pursuant to this subtitle;

(c) That both the operator and the agent shall not authorize subagents;

(d) That the agent shall timely remit all legal tender and virtual currency legally

due to the operator in accordance with the terms of the written contract

between the operator and the agent;

(e) That the operator and agent are subject to regulation by the commissioner; and

(f) That the operator and agent shall comply with all applicable federal and state

laws.

(2) An agent shall not make any fraudulent statements or misrepresentations to:

(a) The virtual currency kiosk operator; or

(b) The commissioner, including any person acting under the commissioner's

authority.

(3) All virtual currency kiosk business conducted by agents shall be strictly conducted

in accordance with the virtual currency kiosk operator's written procedures

provided to the agent.

(4) (a) An agent shall timely remit all legal tender and virtual currency legally due to

the virtual currency kiosk operator in accordance with the terms of the written

contract between the licensee and the agent.

(b) The commissioner shall have the discretion to set, by administrative

regulation or order, the maximum remittance time.

(5) An agent shall act only as authorized under the written contract with the virtual

currency kiosk operator.

(6) (a) All funds, less fees, received by an agent of a virtual currency kiosk operator

from virtual currency kiosk business shall, from the time the funds are

received by the agent until such time when the funds or an equivalent amount

are remitted by the agent to the operator, constitute trust funds owned by and

belonging to the operator.

(b) If an agent commingles any of these funds with any other funds or property

owned or controlled by the agent, then all commingled proceeds and other

property shall be impressed with a trust in favor of the virtual currency kiosk

operator in an amount equal to the amount of the proceeds due the operator.

(7) An agent shall report to the virtual currency kiosk operator the theft, forgery, or loss

of the operator's or a virtual currency kiosk user's funds within twenty -four (24)

hours from the time the agent learned of the theft, forgery, or loss.