California Financial Code § 3501

(a) When engaging in digital financial business activity with a resident, a covered person shall provide to a resident the disclosures required by subdivision (b) and any additional disclosure the department by rule determines reasonably necessary for the protection of residents. The department shall determine by rule the time and form required for disclosure. A disclosure required by this section shall be made separately from any other information provided by the covered person and in a clear and conspicuous manner in a record the resident may keep. A covered person may propose, for the department’s approval, alternate disclosures as more appropriate for its digital financial asset business activity with, or on behalf of, residents. (b) Before engaging in digital financial asset business activity with a resident, a covered person shall disclose, to the extent applicable to the digital financial asset business activity the covered person will undertake with the resident, all of the following: (1) A schedule of fees and charges the covered person may assess, the manner by which fees and charges will be calculated if they are not set in advance and disclosed, and the timing of the fees and charges. (2) Whether the product or service provided by the covered person is covered by either of the following: (A) A form of insurance or other guarantee against loss by an agency of the United States as follows: (i) Up to the full United States dollar equivalent of digital financial assets placed under the control of, or purchased from, the covered person as of the date of the placement or purchase, including the maximum amount provided by insurance under the Federal Deposit Insurance Corporation, National Credit Union Share Insurance Fund, or otherwise available from the Securities Investor Protection Corporation. (ii) If not provided at the full United States dollar equivalent of the digital financial asset placed under the control of or purchased from the covered person, the maximum amount of coverage for each resident expressed in the United States dollar equivalent of the digital financial asset. (B) (i) Private insurance against theft or loss, including cybertheft or theft by other means. (ii) Upon request of a resident with whom a covered person engages in digital financial asset business activity, a covered person shall disclose the terms of the insurance policy to the resident in a manner that allows the resident to understand the specific insured risks that may result in partial coverage of the resident’s assets. (3) The irrevocability of a transfer or exchange and any exception to irrevocability. (4) A description of all of the following: (A) The covered person’s liability for an unauthorized, mistaken, or accidental transfer or exchange. (B) The resident’s responsibility to provide notice to the covered person of an unauthorized, mistaken, or accidental transfer or exchange. (C) The basis for any recovery by the resident from the covered person in case of an unauthorized, mistaken, or accidental transfer or exchange. (D) General error resolution rights applicable to an unauthorized, mistaken, or accidental transfer or exchange. (E) The method for the resident to update the resident’s contact information with the covered person. (5) That the date or time when the transfer or exchange is made and the resident’s account is debited may differ from the date or time when the resident initiates the instruction to make the transfer or exchange. (6) Whether the resident has a right to stop a preauthorized payment or revoke authorization for a transfer and the procedure to initiate a stop-payment order or revoke authorization for a subsequent transfer. (7) The resident’s right to receive a receipt, trade ticket, or other evidence of the transfer or exchange. (8) The resident’s right to at least 14 days’ prior notice of a change in the covered person’s fee schedule, other terms and conditions that have a material impac

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