Perfecting Digital Assets: There's No Control Without Power

In 2022, the Uniform Law Commission adopted new amendments to the model Uniform Commercial Code ("UCC") to address cryptocurrency transactions, including secured lending involving digital assets. These amendments have been enacted by at least five states (Washington, New Mexico, Colorado, Indiana and North Dakota) and introduced in another 21 states (including California and Texas, but not New York).

If the UCC amendments become widely adopted, it should be a welcome change to the crypto space, bringing uniformity to the law and reducing risk in virtual currency transactions.

A category of digital assets that controls

A new Article 12 creates a legal regime for transactions involving a new category of digital assets referred to as "Controllable Electronic Records" (CERs). A CER is defined simply as a "record stored in an electronic medium that can be subjected to control under Section 12-105." UCC § 12-102(1).