Representative Trevor Lee proposes the following substitute bill:


1     
PROHIBITION OF PRODUCTION OF PRIVATE KEYS

2     
2024 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Trevor Lee

5     
Senate Sponsor: Kirk A. Cullimore

6     

7     LONG TITLE
8     General Description:
9          This bill provides protection for private personal digital data.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms; and
13          ▸     provides protection to a person from being compelled to produce the person's
14     private electronic key that provides access to the person's digital assets, identity, or
15     other interest.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          None
20     Utah Code Sections Affected:
21     AMENDS:
22          13-62-101, as enacted by Laws of Utah 2022, Chapter 448
23     ENACTS:
24          13-62-103, Utah Code Annotated 1953
25     

26     Be it enacted by the Legislature of the state of Utah:
27          Section 1. Section 13-62-101 is amended to read:
28          13-62-101. Definitions.
29          As used in this chapter:
30          (1) "Agent" means a person who is authorized to act on behalf of an owner with respect
31     to a digital asset.
32          (2) "Control" means:
33          (a) an owner or an agent has the exclusive legal authority to conduct a transaction
34     relating to the digital asset, including by means of a private key or the use of a multi-signature
35     arrangement the owner or agent authorizes; or
36          (b) a secured party has created a smart contract [which] that gives the secured party
37     exclusive legal authority to conduct a transaction relating to a digital security.
38          (3) (a) "Digital asset" means a representation of economic, proprietary, or access rights
39     that is stored in a computer readable format.
40          (b) "Digital asset" includes:
41          (i) a digital user asset; or
42          (ii) a digital security.
43          (4) "Digital security" means a digital asset [which] that constitutes a security, as that
44     term is defined in Section 70A-8-101.
45          (5) (a) "Digital user asset" means a digital asset that is used or bought primarily for
46     consumptive, personal, or household purposes.
47          (b) "Digital user asset" includes an open blockchain token.
48          (c) "Digital user asset" does not include a digital security.
49          (6) "Multi-signature arrangement" means a system of access control relating to a digital
50     asset for the purposes of preventing unauthorized transactions relating to the digital asset, in
51     which two or more private keys are required to conduct a transaction.
52          (7) "Private key" means a unique element of cryptographic data[, which] that is:
53          (a) held by a person;
54          (b) paired with a [unique, publicly available element of cryptographic data] public key;
55     and
56          (c) [associated with an algorithm that is necessary to carry out an encryption or
57     decryption required to execute a transaction.] used to digitally sign a transaction.
58          (8) "Public key" means a unique element of cryptographic data that:
59          (a) is publicly available;
60          (b) is paired with a private key that is held by the owner of the public key; and
61          (c) allows viewing, but not digitally signing, electronic transactions.
62          [(8)] (9) "Smart contract" means a transaction [which] that is comprised of code, script,
63     or programming language that executes the terms of an agreement, and which may include
64     taking custody of and transferring a digital asset, or issuing executable instructions for these
65     actions, based on the occurrence or nonoccurrence of specified conditions.
66          Section 2. Section 13-62-103 is enacted to read:
67          13-62-103. Protection of private keys.
68          (1) (a) Except as provided in Subsection (1)(b), a person may not be compelled to
69     produce a private key, or any components that allow the derivation of a private key, or make a
70     private key known to any other person in any civil, criminal, administrative, legislative, or
71     other proceeding in the state that relates to a digital asset, digital identity, or other interest or
72     right to which the private key provides access.
73          (b) A person may be compelled in a civil, criminal, administrative, legislative, or other
74     lawful proceeding in the state to produce a private key if a public key is unavailable or unable
75     to disclose the information requested to be obtained.
76          (2) A person may be compelled by court order to:
77          (a) produce, sell, transfer, convey, or disclose a digital asset, digital identity, or other
78     interest or right to which a private key provides access; or
79          (b) disclose information about the digital asset, digital identity, or other interest or
80     right.
81          Section 3. Effective date.
82          This bill takes effect on May 1, 2024.