INFORMATION TECHNOLOGY

KRS tit. XXIX, ch. 369

in effect

KRS 369.010 Repealed, 2000

369.010. Repealed, 2000 Catchline at repeal: Legislative intent of KRS 369.010 to 369.030. History: Repealed 2000 Ky. Acts ch. 301, sec. 21, effective August 1, 2000. -- Created 1998 Ky. Acts ch. 363, sec. 1, effective July 15, 1998.

KRS 369.020 Repealed, 2000

369.020. Repealed, 2000 Catchline at repeal: Definitions for KRS 369.010 to 369.030. History: Repealed 2000 Ky. Acts ch. 301, sec. 21, effective August 1, 2000. -- Created 1998 Ky. Acts ch. 363, sec. 2, effective July 15, 1998.

KRS 369.030 Repealed, 2000

369.030. Repealed, 2000 Catchline at repeal: Use of electronic record or electronic signature -- Construction and scope of KRS 369.010 to 369.030. History: Repealed 2000 Ky. Acts ch. 301, sec. 21, effective August 1, 2000. -- Created 1998 Ky. Acts ch. 363, sec. 3, effective July 15, 1998.

KRS 369.101 Short title for KRS 369.101 to 369.120

369.101. Short title for KRS 369.101 to 369.120 KRS 369.101 to 369.120 may be cited as the Uniform Electronic Transactions Act. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 1, effective August 1, 2000.

KRS 369.102 Definitions for KRS 369.101 to 369.120

369.102. Definitions for KRS 369.101 to 369.120 As used in KRS 369.101 to 369.120, unless the context requires otherwise: (1) "Agreement" means the bargain of the parties in fact, as found in their language or inferred from other circumstances and from rules, regulations, and procedures given the effect of agreements under laws otherwise applicable to a particular transaction; (2) "Automated transaction" means a transaction conducted or performed, in whole or in part, by electronic means or electronic records, in which the acts of records of one (1) or both parties are not reviewed by an individual in the ordinary course in forming a contract, performing under an existing contract, or fulfilling an obligation required by the transaction; (3) "Computer program" means a set of statements or instructions to be used directly or indirectly in an information processing system in order to bring about a certain result; (4) "Contract" means the total legal obligation resulting from the parties' agreement as affected by KRS 369.101 to 369.120 and other applicable law; (5) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities; (6) "Electronic agent" means a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual; (7) "Electronic record" means a record created, generated, sent, communicated, received, or stored by electronic means; (8) "Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record; (9) "Governmental agency" means an executive, legislative, or judicial agency, department, board, commission, authority, institution, or instrumentality of the federal government or of a state or of a county, municipality, or other political subdivision of a state; (10) "Information" means data, text, images, sounds, codes, computer programs, software, databases, or the like; (11) "Information processing system" means an electronic system for creating, generating, sending, receiving, storing, displaying, or processing information; (12) "Person" means an individual, corporation, business or statutory trust, estate, trust, partnership, limited partnership, limited liability company, association, limited cooperative association, joint venture, governmental agency, public corporation, or any other legal or commercial entity; (13) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form; (14) "Security procedure" means a procedure employed for the purpose of verifying that an electronic signature, record, or performance is that of a specific person or for detecting changes or errors in the information in an electronic record. The term includes a procedure that requires the use of algorithms or other codes, identifying words or numbers, encryption, or callback or other acknowledgment procedures; (15) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band, or Alaskan native village, which is recognized by federal law or formally acknowledged by a state; and (16) "Transaction" means an action or set of actions occurring between two (2) or more persons relating to the conduct of business, commercial, or governmental affairs. Effective: June 24, 2015 History: Amended 2015 Ky. Acts ch. 34, sec. 62, effective June 24, 2015. -- Created 2000 Ky. Acts ch. 301, sec. 2, effective August 1, 2000.

KRS 369.103 Scope of KRS 369.101 to 369.120

369.103. Scope of KRS 369.101 to 369.120 (1) Except as otherwise provided in subsection (2) of this section, KRS 369.101 to 369.120 applies to electronic records and electronic signatures relating to a transaction. (2) KRS 369.101 to 369.120 does not apply to a transaction to the extent it is governed by: (a) A law governing the creation and execution of wills, codicils, or testamentary trusts; (b) KRS Chapter 355 other than KRS 355.1-107 and 355.1-206, and Articles 2 and 2A of KRS Chapter 355; and (c) A law governing the creation or transfer of any negotiable instrument or any instrument establishing title or an interest in title to a motor vehicle and governed by KRS Chapter 186 or 186A. (3) KRS 369.101 to 369.120 applies to an electronic record or electronic signature otherwise excluded from the application of KRS 369.101 to 369.120 under subsection (2) of this section to the extent it is governed by a law other than those specified in subsection (2) of this section. (4) A transaction subject to KRS 369.101 to 369.120 is also subject to other applicable substantive law. Effective: January 1, 2020 History: Amended 2019 Ky. Acts ch. 86, sec. 38, effective January 1, 2020. -- Created 2000 Ky. Acts ch. 301, sec. 3, effective August 1, 2000.

KRS 369.104 Prospective application of KRS 369.101 to 369.120

369.104. Prospective application of KRS 369.101 to 369.120 KRS 369.101 to 369.120 applies to any electronic record or electronic signature created, generated, sent, communicated, received, or stored on or after August 1, 2000. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 4, effective August 1, 2000.

KRS 369.105 Use of electronic records and electronic signatures -- Variation by agreement

369.105. Use of electronic records and electronic signatures -- Variation by agreement (1) KRS 369.101 to 369.120 does not require a record or signature to be created, generated, sent, communicated, received, stored, or otherwise processed or used by electronic means or in electronic form. (2) KRS 369.101 to 369.120 applies only to transactions between parties each of which has agreed to conduct transactions by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties' conduct. (3) A party that agrees to conduct a transaction by electronic means may refuse to conduct other transactions by electronic means. The right granted by this subsection may not be waived by agreement. (4) Except as otherwise provided in KRS 369.101 to 369.120, the effect of any of its provisions may be varied by agreement. The presence in certain provisions of KRS 369.101 to 369.120 of the words "unless otherwise agreed," or words of similar import, does not imply that the effect of other provisions may not be varied by agreement. (5) Whether an electronic record or electronic signature has legal consequences is determined by KRS 369.101 to 369.120 and other applicable law. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 5, effective August 1, 2000.

KRS 369.106 Construction and application of KRS 369.101 to 369.120

369.106. Construction and application of KRS 369.101 to 369.120 KRS 369.101 to 369.120 must be construed and applied: (1) To facilitate electronic transactions consistent with other applicable law; (2) To be consistent with reasonable practices concerning electronic transactions and with the continued expansion of those practices; and (3) To effectuate its general purpose to make uniform the law with respect to the subject of KRS 369.101 to 369.120 among states enacting it. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 6, effective August 1, 2000.

KRS 369.107 Legal recognition of electronic records, electronic signatures, and electronic contracts

369.107. Legal recognition of electronic records, electronic signatures, and electronic contracts (1) A record or signature may not be denied legal effect or enforceability solely because it is in electronic form. (2) A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation. (3) If a law requires a record to be in writing, an electronic record satisfies the law. (4) If a law requires a signature, an electronic signature satisfies the law. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 7, effective August 1, 2000.

KRS 369.108 Provision of information in writing -- Presentation of records

369.108. Provision of information in writing -- Presentation of records (1) If parties have agreed to conduct a transaction by electronic means and a law requires a person to provide, send, or deliver information in writing to another person, the requirement is satisfied if the information is provided, sent, or delivered, as the case may be, in an electronic record capable of retention by the recipient at the time of receipt. An electronic record is not capable of retention by the recipient if the sender or its information processing system inhibits the ability of the recipient to print or store the electronic record. (2) If a law other than KRS 369.101 to 369.120 requires a record to be posted or displayed in a certain manner, to be sent, communicated, or transmitted by a specified method, or to contain information that is formatted in a certain manner, the following rules apply: (a) The record must be posted or displayed in the manner specified in the other law. (b) Except as otherwise provided in subsection (4)(b) of this section, the record must be sent, communicated, or transmitted by the method specified in the other law. (c) The record must contain the information formatted in the manner specified in the other law. (3) If a sender inhibits the ability of a recipient to store or print an electronic record, the electronic record is not enforceable against the recipient. (4) The requirements of this section may not be varied by agreement, but: (a) To the extent a law other than KRS 369.101 to 369.120 requires information to be provided, sent, or delivered in writing but permits that requirement to be varied by agreement, the requirement under subsection (1) of this section that the information be in the form of an electronic record capable of retention may also be varied by agreement; and (b) A requirement under a law other than KRS 369.101 to 369.120 to send, communicate, or transmit a record by United States mail may be varied by agreement to the extent permitted by the other law. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 8, effective August 1, 2000.

KRS 369.109 Attribution and effect of electronic record and electronic signature

369.109. Attribution and effect of electronic record and electronic signature (1) An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable. (2) The effect of an electronic record or electronic signature attributed to a person under subsection (1) of this section is determined from the context and surrounding circumstances at the time of its creation, execution, or adoption, including the parties' agreement, if any, and otherwise as provided by law. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 9, effective August 1, 2000.

KRS 369.110 Effect of change or error

369.110. Effect of change or error If a change or error in an electronic record occurs in a transmission between parties to a transaction, the following rules apply: (1) If the parties have agreed to use a security procedure to detect changes or errors and one (1) party has conformed to the procedure, but the other party has not, and the nonconforming party would have detected the change or error had that party also conformed, the conforming party may avoid the effect of the changed or erroneous electronic record. (2) In an automated transaction involving an individual, the individual may avoid the effect of an electronic record that resulted from an error made by the individual in dealing with the electronic agent of another person if the electronic agent did not provide an opportunity for the prevention or correction of the error and, at the time the individual learns of the error, the individual: (a) Promptly notifies the other person of the error and that the individual did not intend to be bound by the electronic record received by the other person; (b) Takes reasonable steps, including steps that conform to the other person's reasonable instructions, to return to the other person or, if instructed by the other person, to destroy the consideration received, if any, as a result of the erroneous electronic record; and (c) Has not used or received any benefit or value from the consideration, if any, received from the other person. (3) If neither subsection (1) of this section nor subsection (2) of this section applies, the change or error has the effect provided by other law, including the law of mistake, and the parties' contract, if any. (4) Subsections (2) and (3) of this section may not be varied by agreement. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 10, effective August 1, 2000.

KRS 369.111 Notarization and acknowledgment

369.111. Notarization and acknowledgment If a law requires a signature or record to be notarized, acknowledged, verified, or made under oath, the requirement is satisfied if the electronic signature of the person authorized to perform those acts, together with all other information required to be included by other applicable law, is attached to or logically associated with the signature or record. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 11, effective August 1, 2000.

KRS 369.112 Retention of electronic records -- Originals

369.112. Retention of electronic records -- Originals (1) If a law requires that a record be retained, the requirement is satisfied by retaining an electronic record of the information in the record which: (a) Accurately reflects the information set forth in the record after it was first generated in its final form as an electronic record or otherwise; and (b) Remains accessible for later reference. (2) A requirement to retain a record in accordance with subsection (1) of this section does not apply to any information the sole purpose of which is to enable the record to be sent, communicated, or received. (3) A person may satisfy subsection (1) of this section by using the services of another person if the requirements of that subsection are satisfied. (4) If a law requires a record to be presented or retained in its original form, or provides consequences if the record is not presented or retained in its original form, that law is satisfied by an electronic record retained in accordance with subsection (1) of this subsection. (5) If a law requires retention of a check, that requirement is satisfied by retention of an electronic record of the information on the front and back of the check in accordance with subsection (1) of this subsection. (6) A record retained as an electronic record in accordance with subsection (1) of this section satisfies a law requiring a person to retain a record for evidentiary, audit, or like purposes, unless a law enacted after August 1, 2000, specifically prohibits the use of an electronic record for the specified purpose. (7) This section does not preclude a governmental agency of this state from specifying additional requirements for the retention of a record subject to the agency's jurisdiction. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 12, effective August 1, 2000.

KRS 369.113 Admissibility in evidence

369.113. Admissibility in evidence In a proceeding, evidence of a record or signature may not be excluded solely because it is in electronic form. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 13, effective August 1, 2000.

KRS 369.114 Automated transaction

369.114. Automated transaction In an automated transaction, the following rules apply: (1) A contract may be formed by the interaction of electronic agents of the parties, even if no individual was aware of or reviewed the electronic agents' actions or the resulting terms and agreements. (2) A contract may be formed by the interaction of an electronic agency and an individual, acting on the individual's own behalf or for another person, including by an interaction in which the individual performs actions that the individual is free to refuse to perform and which the individual knows or has reason to know will cause the electronic agent to complete the transaction or performance. (3) The terms of the contract are determined by the substantive law applicable to it. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 14, effective August 1, 2000.

KRS 369.115 Time and place of sending and receipt

369.115. Time and place of sending and receipt (1) Unless otherwise agreed between the sender and the recipient, an electronic record is sent when it: (a) Is addressed properly or otherwise directed properly to an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent and from which the recipient is able to retrieve the electronic record; (b) Is in a form capable of being processed by that system; and (c) Enters an information processing system outside the control of the sender or of a person that sent the electronic record on behalf of the sender or enters a region of the information processing system designated or used by the recipient which is under the control of the recipient. (2) Unless otherwise agreed between a sender and the recipient, an electronic record is received when: (a) It enters an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent and from which the recipient is able to retrieve the electronic record; and (b) It is in a form capable of being processed by that system. (3) Subsection (2) of this section applies even if the place the information processing system is located is different from the place the electronic record is deemed to be received under subsection (4) of this section. (4) Unless otherwise expressly provided in the electronic record or agreed between the sender and the recipient, an electronic record is deemed to be sent from the sender's place of business and to be received at the recipient's place of business. For purposes of this subsection, the following rules apply: (a) If the sender or recipient has more than one (1) place of business, the place of business of that person is the place having the closest relationship to the underlying transaction. (b) If the sender or the recipient does not have a place of business, the place of business is the sender's or recipient's residence, as the case may be. (5) An electronic record is received under subsection (2) of this section even if no individual is aware of its receipt. (6) Receipt of an electronic acknowledgment from an information processing system described in subsection (2) of this section establishes that a record was received but, by itself, does not establish that the content sent corresponds to the content received. (7) If a person is aware that an electronic record purportedly sent under subsection (1) of this section, or purportedly received under subsection (2) of this section, was not actually sent or received, the legal effect of the sending or receipt is determined by other applicable law. Except to the extent permitted by the other law, the requirements of this subsection may not be varied by agreement. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 15, effective August 1, 2000.

KRS 369.116 Transferable records

369.116. Transferable records (1) In this section, "transferable record" means an electronic record that: (a) Would be a note under Article 3 of KRS Chapter 355 or a document under Article 7 of KRS Chapter 355 if the electronic record were in writing; and (b) The issuer of the electronic record expressly has agreed is a transferable record. (2) A person has control of a transferable record if a system employed for evidencing the transfer of interests in the transferable record reliably establishes that person as the person to which the transferable record was issued or transferred. (3) A system satisfies subsection (2) of this section, and a person is deemed to have control of a transferable record, if the transferable record is created, stored, and assigned in such a manner that: (a) A single authoritative copy of the transferable record exists which is unique, identifiable, and, except as otherwise provided in paragraphs (d), (e), and (f) of this subsection, unalterable; (b) The authoritative copy identifies the person asserting control as: 1. The person to which the transferable record was issued; or 2. If the authoritative copy indicates that the transferable record has been transferred, the person to which the transferable record was most recently transferred; (c) The authoritative copy is communicated to and maintained by the person asserting control or its designated custodian; (d) Copies of revisions that add or change an identified assignee of the authoritative copy can be made only with the consent of the person asserting control; (e) Each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy; and (f) Any revision of the authoritative copy is readily identifiable as authorized or unauthorized. (4) (a) Except as otherwise agreed, a person having control of a transferable record is the holder, as defined in KRS 355.1-201, of the transferable record and has the same rights and defenses as a holder of an equivalent record or writing under KRS Chapter 355, including, if the applicable statutory requirements under KRS 355.3-302(1), 355.7-501, or 355.9-330 are satisfied, the rights and defenses of a holder in due course, a holder to which a negotiable document of title has been duly negotiated, or a purchaser, respectively. (b) Delivery, possession, and indorsement are not required to obtain or exercise any of the rights under this subsection. (5) Except as otherwise agreed, an obligor under a transferable record has the same rights and defenses as an equivalent obligor under equivalent records or writing under KRS Chapter 355. (6) If requested by a person against which enforcement is sought, the person seeking to enforce the transferable record shall provide reasonable proof that the person is in control of the transferable record. Proof may include access to the authoritative copy of the transferable record and related business records sufficient to review the terms of the transferable record and to establish the identity of the person having control of the transferable record. Effective: January 1, 2025 History: Amended 2024 Ky. Acts ch. 10, sec. 112, effective January 1, 2025. -- Amended 2000 Ky. Acts ch. 301, sec. 23, effective July 1 2001. -- Created 2000 Ky. Acts ch. 301, sec. 16, effective August 1, 2000.

KRS 369.117 Creation and retention of electronic records by governmental agencies -- Conversion of written records by governmental agencies

369.117. Creation and retention of electronic records by governmental agencies -- Conversion of written records by governmental agencies Each governmental agency of this Commonwealth shall determine whether, and the extent to which, it will create electronic records. The Kentucky Department for Libraries and Archives shall determine whether, and the extent to which, the Commonwealth will retain electronic records and convert written records to electronic records. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 17, effective August 1, 2000.

KRS 369.118 Acceptance and distribution of electronic records by governmental agencies

369.118. Acceptance and distribution of electronic records by governmental agencies (1) Except as otherwise provided in KRS 369.112(6), each governmental agency of this state, in compliance with standards established by the Commonwealth Office of Technology, shall determine whether, and the extent to which, it will send and accept electronic records and electronic signatures to and from other persons and otherwise create, generate, communicate, store, process, use, and rely upon electronic records and electronic signatures. (2) To the extent that a governmental agency uses electronic records and electronic signatures under subsection (1) of this section: (a) The Commonwealth Office of Technology, giving due consideration to security, may specify the manner and format in which the electronic records must be created, generated, sent, communicated, received, and stored and the systems established for those purposes; (b) If electronic records must be signed by electronic means, each governmental agency, giving due consideration to security, may specify the type of electronic signature required, the manner and format in which the electronic signature must be affixed to the electronic record, and the identity of, or criteria that must be met by, any third party used by a person filing a document to facilitate the process; (c) The Commonwealth Office of Technology and the Department for Libraries and Archives, giving due consideration to security, may specify control processes and procedures as appropriate to ensure adequate preservation, disposition, integrity, security, confidentiality, and auditability of electronic records; and (d) Each governmental agency, giving due consideration to security, may specify any other required attributes for electronic records which are specified for corresponding nonelectronic records or reasonably necessary under the circumstances. (3) Except as otherwise provided in KRS 369.112(6), KRS 369.101 to 369.120 does not require a governmental agency of this state to use or permit the use of electronic records or electronic signatures. Effective: June 20, 2005 History: Amended 2005 Ky. Acts ch. 85, sec. 693, effective June 20, 2005. -- Created 2000 Ky. Acts ch. 301, sec. 18, effective August 1, 2000.

KRS 369.119 Interoperability

369.119. Interoperability The Commonwealth Office of Technology, which adopts standards pursuant to KRS 369.118(2)(a), may encourage and promote consistency and interoperability with similar requirements adopted by other governmental agencies of this and other states and the federal government and nongovernmental persons interacting with governmental agencies of this state. If appropriate, those standards may specify differing levels of standards from which governmental agencies of this state may choose in implementing the most appropriate standard for a particular application. Effective: June 20, 2005 History: Amended 2005 Ky. Acts ch. 85, sec. 694, effective June 20, 2005. -- Created 2000 Ky. Acts ch. 301, sec. 19, effective August 1, 2000.

KRS 369.120 Severability of provisions

369.120. Severability of provisions If any provision of KRS 369.101 to 369.120 or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of KRS 369.101 to 369.120 which can be given effect without the invalid provision or application, and to this end the provisions of KRS 369.101 to 369.120 are severable. Effective: August 1, 2000 History: Created 2000 Ky. Acts ch. 301, sec. 20, effective August 1, 2000.

KRS 369.130 Definitions for KRS 369.130 to 369.139

369.130. Definitions for KRS 369.130 to 369.139 As used in KRS 369.130 to 369.139: (1) "Blockchain" means data that is: (a) Shared across a peer-to-peer network to create a ledger of verified transactions or information among linked network participants using cryptography to: 1. Maintain the integrity of the ledger; or 2. Execute other functions; and (b) Distributed in a concurrent, automated update to network participants on the state of the ledger and any other functions; (2) "Blockchain network" means a technical infrastructure that provides ledger and smart contract services to applications; (3) "Blockchain protocol" means any executable software: (a) Deployed to a blockchain, including an additional standardized set of rules that: 1. Uses an existing blockchain as a base; 2. Facilitates the transfer of data and electronic records; 3. Allows that data to be broadcast to nodes; and 4. Is governed by a set of predefined rules which execute autonomously without human intervention and can be altered by a predetermined mechanism; and (b) Composed of a source code that is publicly available and accessible, including a smart contract or any network of smart contracts; (4) "Cryptocurrency" has the same meaning as in KRS 139.516; (5) "Cryptography" means the practice of coding information to ensure only the person that a message was written for can read and process that information; (6) "Digital asset" means: (a) Virtual currency; (b) Cryptocurrency; and (c) Natively electronic assets, including stablecoins, fungible tokens, and nonfungible tokens; that confer economic, proprietary, or access rights or powers; (7) "Hardware wallet" means a physical device that: (a) Stores private keys offline; (b) Provides a way to sign transactions and interact with the blockchain; and (c) Allows the owner to retain independent control over the digital asset contained therein; (8) "Natively electronic asset" means a purely digital asset that exists only on the blockchain network; (9) "Node" means a computer which: (a) Uses software to: 1. Communicate with other devices or participants on a blockchain to maintain consensus and integrity of that blockchain; 2. Create and validate transaction blocks; or 3. Contain and update a copy of a blockchain; and (b) Does not exercise discretion over transactions initiated by the end users of the blockchain protocol; (10) "Nonfungible token" means a digital asset on a blockchain that: (a) Has unique identification codes and metadata that are recorded; (b) Has been tokenized and cannot be replicated; (c) Is used to certify ownership and authenticity; and (d) Represents digital or physical items including artwork or real estate; (11) "Private key" means the access to manage digital assets at a specific internet address and may be used for encryption and digital signature; (12) "Self-hosted wallet" means a digital interface that can: (a) Secure and transfer digital assets; and (b) Allow its owner to retain independent control of the secured digital assets and private keys; (13) "Smart contract" has the same meaning as in KRS 42.747; (14) "Stablecoin" means a digital asset that is: (a) Issued by a corporation; (b) Backed by cash or high-quality liquid assets; and (c) Redeemable on demand by the holder at par for a fixed monetary value in equivalent United States dollars; (15) "Staking" means using a node to commit digital assets to a blockchain network to: (a) Validate transactions; (b) Propose and attest to blocks contained in the blockchain; and (c) Secure the network; (16) (a) "Staking as a service" means the provision of technical staking services by a service provider on behalf of an individual or business that owns the digital assets being staked. (b) "Staking as a service" includes the operation of nodes and the associated infrastructure necessary to facilitate participation in blockchain protocols’ consensus mechanisms; (17) "Third-party wallet" means a wallet that is hosted and controlled by a party other than the owner which contains the private keys for the owner of digital assets; and (18) "Wallet" means a digital interface or a physical device which holds digital assets or private keys, and may include a: (a) Hardware wallet; (b) Self-hosted wallet; and (c) Third-party wallet. Effective: June 27, 2025 History: Created 2025 Ky. Acts ch. 50, sec. 1, effective June 27, 2025.

KRS 369.135 Use of digital assets as method of payment and use of wallet -- Prohibition against additional taxes or withholdings

369.135. Use of digital assets as method of payment and use of wallet -- Prohibition against additional taxes or withholdings (1) An individual shall not be prohibited from: (a) Accepting digital assets for payment for legal goods or services; or (b) The use of a wallet. (2) Digital assets used as a method of payment shall not be subject to additional taxes, withholdings, assessments, or charges that are based solely on the use of the digital asset as the method of payment. (3) This section shall not: (a) Prohibit the imposition or collection of taxes, withholdings, assessments, or charges on digital assets used as the method of payment when the same imposition and collections of taxes, withholdings, assessments, or charges are made on similar transactions which use the legal tender of the United States as the method of payment; or (b) Require any person to accept digital assets for payment for legal goods or services. Effective: June 27, 2025 History: Created 2025 Ky. Acts ch. 50, sec. 2, effective June 27, 2025.

KRS 369.137 Disclosures by hardware wallet provider -- Penalties -- Administrative regulations

369.137. Disclosures by hardware wallet provider -- Penalties -- Administrative regulations (1) As used in this section, "hardware wallet provider" or "provider" means a person that offers or provides a hardware wallet. (2) (a) A hardware wallet provider shall provide the following disclosures to customers for all hardware wallets sold in Kentucky: 1. All information that a customer should retain, maintain, and store in order to: a. Access the contents of a wallet; and b. Backup and restore a wallet; and 2. If applicable: a. The provider does not retain, maintain, or store the information that a customer needs to: i. Access the contents of a wallet; or ii. Backup and restore a wallet; and b. The customer's loss of the information referenced in subparagraph 1. of this paragraph will likely result in a total loss of the contents of a wallet. (b) The disclosures required under paragraph (a) of this subsection shall be: 1. Displayed during wallet setup; 2. Contained in product packaging; 3. On the provider's website; 4. Furnished together in a clear and coherent manner; 5. In the same color, font, and size as the other language primarily used for the wallet setup, in the product packaging, or on the provider's website, as applicable; and 6. Available in a format that can be easily downloaded, printed, or otherwise retained by the customer. (3) A violation of this section shall be deemed unlawful as provided in KRS 367.356. (4) (a) The remedies and penalties prescribed in this section shall be cumulative. (b) This section shall not be construed to limit or restrict the powers, duties, remedies, or penalties available to the Attorney General, the Commonwealth, or any other person under any other statutory or common law. (5) The Attorney General may promulgate administrative regulations in accordance with KRS Chapter 13A necessary to effectuate, or as an aid to the effectuation of, the proper enforcement of this section. Effective: July 15, 2026 History: Created 2026 Ky. Acts ch. 126, sec. 33, effective July 15, 2026.

KRS 369.139 Operation of node -- Authority of Attorney General -- Limitation on liability

369.139. Operation of node -- Authority of Attorney General -- Limitation on liability (1) The operation of a node shall be allowed to: (a) Connect to a blockchain protocol and participate in the blockchain protocol's operations; (b) Transfer digital assets on a blockchain protocol; or (c) Participate in staking on a blockchain protocol. (2) The Attorney General may initiate any action under KRS 367.110 to 367.300 relating to the offering or providing staking as a service to individuals or other businesses. (3) A person: (a) Operating a node or series of nodes on a blockchain network; or (b) Providing staking as a service; shall have no liability for a specific transaction if the person only validates the transaction. Effective: June 27, 2025 History: Created 2025 Ky. Acts ch. 50, sec. 3, effective June 27, 2025.

Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=39128Fetched: 10/20/2026