The Washington Uniform Commercial Code (UCC) Article 12, concerning Digital Assets, defines a “digital asset” as a representation of value that is used with the intent to be exchanged, transferred, or used as a means of payment, exchange, or investment, and is recorded on a cryptographically secured or similar distributed ledger. The question revolves around whether a specific digital asset, a unique non-fungible token (NFT) representing ownership of a digital artwork, falls under this definition in Washington State. The key elements for classification under Article 12 are that the asset must be a representation of value, intended for exchange, transfer, or use as a medium of payment/investment, and recorded on a distributed ledger. An NFT, by its nature, represents ownership of a unique digital item, is intended for trading and investment, and is typically recorded on a blockchain, which is a type of distributed ledger. Therefore, such an NFT would qualify as a digital asset under Washington’s UCC Article 12. The scope of Article 12 is broad, encompassing various forms of digital value. The definition is designed to capture assets that function economically in a digital realm, regardless of their underlying technology, as long as they meet the criteria of representation of value, intent for exchange or investment, and recording on a distributed ledger.

The Washington State Money Transmitter Act (RCW 19.235) defines a money transmitter as a person who engages in the business of receiving money for transmission to a location outside this state or for deposit elsewhere. Digital assets, particularly those that function as a medium of exchange or store of value and are transferable, can fall under this definition if they are used in a transmission or deposit context that mirrors traditional money transmission. Specifically, the Washington State Department of Financial Institutions (DFI) has clarified that certain activities involving virtual currencies, such as exchanging one virtual currency for another or exchanging virtual currency for fiat currency, can be considered money transmission. When a platform facilitates the conversion of fiat currency into a digital asset and then the transmission of that digital asset to a third party, or the conversion of a digital asset back to fiat for transmission, it is engaging in activities that the DFI interprets as money transmission under the Act. Therefore, a business that facilitates the exchange of fiat currency for a digital asset and subsequent transfer of that digital asset to another party, or vice-versa, would likely require a money transmitter license in Washington, absent specific exemptions. The key is the facilitation of the transfer of value, whether in fiat or digital form, on behalf of another person for a fee.

The Washington State Digital Asset Law, specifically RCW 11.120.010 et seq., governs the rights and responsibilities concerning digital assets upon a person’s death or incapacitation. A digital asset is defined broadly to include electronic records that a person has a right to access or possess. The law establishes a hierarchical approach to determining who controls these assets. Initially, the law looks to the user’s terms of service or other agreements with the provider of the digital asset. If such agreements do not address the issue, the law then considers any instructions provided in a will or other testamentary document. If neither of these provides clear direction, the law grants control to the personal representative of the estate. The law also specifies that a fiduciary, such as a personal representative, can access digital assets to the extent necessary to administer the estate, even if the terms of service would otherwise prohibit it. This is to ensure the proper winding up of the deceased’s affairs. The statute aims to provide clarity and a default framework for managing digital assets, which are increasingly significant in modern estates. It acknowledges the unique nature of digital property and seeks to balance the rights of the user, their estate, and the service providers. The core principle is to respect the user’s intent as expressed through agreements, testamentary documents, or, in their absence, through the established legal process of estate administration.

The Washington State Uniform Commercial Code (UCC) Article 12, governing digital assets, defines a “digital asset” broadly. A key aspect is the control a person has over the asset. The statute requires a person to have “control” over a digital asset to be considered its owner for certain purposes. This control is established through a variety of means, depending on the nature of the digital asset and the underlying technology. For example, control over a digital asset recorded on a distributed ledger might be established through possession of the private cryptographic key that allows for the transfer or disposition of the asset, and the ability to exercise exclusive rights over it. Conversely, an asset merely held in a custodial arrangement without the holder possessing the exclusive means to transfer or dispose of it, or without the holder being able to exercise exclusive rights, would not typically confer control under the statute. The question hinges on identifying which scenario demonstrates the necessary elements of control as contemplated by Washington’s digital asset framework. The scenario where an individual possesses the exclusive private key and can independently transfer or dispose of the digital asset, thereby exercising exclusive rights, aligns with the statutory definition of control. This contrasts with situations where a third party retains significant authority or the ability to unilaterally alter or restrict access to the asset.

The Washington State Digital Asset Securities Act (DASA), codified in RCW 21.20.005 and following sections, governs the issuance and trading of digital assets. A key aspect of DASA is its definition of a “digital asset” and its treatment under securities law. Specifically, RCW 21.20.010 defines a security, and this definition is broadly interpreted to encompass digital assets that meet the criteria of an investment contract, as established by the Howey Test. The Howey Test, a Supreme Court precedent, establishes that an investment contract exists if there is an investment of money in a common enterprise with a reasonable expectation of profits to be derived solely from the efforts of others. In Washington, if a digital asset is deemed a security under this framework, its issuance, offer, and sale are subject to the registration requirements of the Washington Securities Act, unless an exemption applies. Failure to register or qualify for an exemption can lead to enforcement actions by the Washington State Department of Financial Institutions (DFI). Therefore, the classification of a digital asset as a security is paramount in determining regulatory obligations. The question tests the understanding that the definition of a security under Washington law, which includes investment contracts, is the primary lens through which digital assets are regulated, triggering registration or exemption requirements.

The Washington State Digital Asset Law, specifically the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) as codified in RCW 11.100.005 et seq., governs how a user’s digital assets are handled upon their death or incapacitation. A user’s “digital asset” is defined broadly to include electronic records in which the user has a right or interest. This includes, but is not limited to, content of electronic communications, digital personal data, and digital financial assets. The law prioritizes the user’s intent as expressed in a “digital asset control document” or their online tool provided by a digital asset service provider. If no such document or tool exists, or if the provider’s terms of service conflict with the user’s directive, the fiduciary’s rights are determined by the provider’s terms of service. However, the law specifically states that a fiduciary cannot be granted access to content of electronic communications, such as emails or instant messages, unless the user has explicitly consented to such access in a digital asset control document or by using the provider’s specific online tool that grants such access. This is a critical distinction to protect the privacy of electronic communications. Therefore, while a fiduciary can manage digital assets like cryptocurrency wallets or online accounts, they generally cannot access the content of private communications without explicit, affirmative consent. The scenario presented involves a fiduciary seeking access to the content of electronic communications of a deceased individual. Without explicit consent via a control document or provider tool, this access is restricted.

The Washington State Money Transmitter Act (RCW 19.235) defines a money transmitter as a person engaged in the business of selling or issuing payment instruments or stored value, or receiving money or monetary value for transmission to another location by any means, including but not limited to, through the use of a computer network, internet, or any other electronic means. The Act specifically addresses digital assets by including them within the definition of “monetary value” if they can be used to purchase goods or services or can be converted into fiat currency. Therefore, an entity that facilitates the exchange of Bitcoin for U.S. dollars, or vice versa, is engaging in the transmission of monetary value. This is further clarified by the Washington State Department of Financial Institutions (DFI) guidance, which interprets the Act broadly to encompass digital asset exchanges. The key is whether the activity involves the transmission of value that can be exchanged for traditional currency or used for commerce. Facilitating peer-to-peer transactions where a platform holds and transfers digital assets on behalf of users, with the intent to convert or transmit them, falls squarely within the scope of money transmission. The scenario describes a platform that allows users to buy and sell Bitcoin using U.S. dollars, and the platform facilitates the transfer of these assets. This activity requires a money transmitter license in Washington State under RCW 19.235.

The Washington State Uniform Commercial Code (UCC) Article 12, concerning Digital Assets, defines a “digital asset” as a representation of economic, proprietary, or contractual rights in a computer network or digital environment that is secured by cryptography and is transferable. The core of this definition lies in its cryptographic security and transferability, which distinguish it from mere digital information or data. For a digital asset to be recognized and governed under Article 12, it must meet these fundamental criteria. The Washington Legislature’s intent with Article 12 was to provide a legal framework for the ownership, transfer, and enforcement of rights related to these unique forms of property, aligning them with existing commercial law principles where applicable, while acknowledging their distinct nature. This includes ensuring that legal protections and commercial practices can adapt to the evolving landscape of digital property. The concept of “control” over a digital asset is also crucial, mirroring the control provisions for other types of assets under the UCC, ensuring clarity in possession and disposition. Therefore, a digital asset under Washington law is characterized by its cryptographic underpinnings and its inherent ability to be transferred, signifying a tangible form of digital property rights.

In Washington State, the definition of a “digital asset” is broad and encompasses any record or information that is commonly controlled or managed by a person, that has intrinsic value, and that is in a digital form. This definition is crucial when considering the application of estate planning laws to digital property. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), as adopted in Washington, provides a framework for how fiduciaries can access and manage a user’s digital assets upon their death or incapacitation. Specifically, RUFADAA distinguishes between different types of digital assets and the methods by which a user can grant access. A user’s “digital estate plan” is a legally effective document that directs the disposition of their digital assets. This plan can include a will, a trust, or a separate document specifically designated for digital asset management. The Washington statute, like the uniform act, prioritizes the user’s intent as expressed in their digital estate plan. If no such plan exists, the statute then looks to the terms of service of the digital asset custodian. In the absence of both, the law may default to granting access to the user’s personal representative or heirs, but this is often subject to significant limitations imposed by the custodian’s terms. Therefore, a comprehensive digital estate plan is the most reliable method to ensure a designated fiduciary can access and manage digital assets, such as cryptocurrency wallets or online accounts containing valuable data, in accordance with the user’s wishes. The question tests the understanding of how a user’s intent regarding digital assets is legally effectuated in Washington, emphasizing the primacy of a digital estate plan over other potential methods of access.

No calculation is required for this question. The Washington State Money Services Business Act, codified in Revised Code of Washington (RCW) Chapter 19.60, defines and regulates money services businesses. Digital assets, particularly those that function as a medium of exchange or store of value, can fall under the purview of this Act. A key aspect of the Act is the requirement for licensing for entities engaging in specific financial activities. The definition of “money transmission” under RCW 19.60.010 is broad and includes the sale or issuance of payment instruments or stored value, or the acceptance of currency or monetary instruments for transmission. While the Act predates widespread adoption of digital assets, regulatory bodies like the Washington State Department of Financial Institutions (DFI) have interpreted its provisions to encompass certain digital asset activities. Specifically, if a digital asset is used to facilitate the transfer of value akin to traditional currency, and the entity engaging in this activity meets the criteria of a money services business, then licensing is generally required. The DFI has issued guidance and interpretive statements clarifying that platforms facilitating the exchange or transfer of cryptocurrencies, where such cryptocurrencies are used for payment or value transfer, may be considered money transmitters. Therefore, an entity operating a platform that allows users to exchange one digital asset for another, or to convert digital assets to fiat currency and vice-versa, and which holds or controls customer funds or digital assets during these transactions, would likely be considered a money services business and subject to the licensing requirements of RCW 19.60.

The Washington State legislature enacted the Uniform Commercial Code (UCC) Article 12, which governs “Controllable Electronic Records” (CERs). This article provides a framework for the legal recognition and transfer of ownership of digital assets that are recorded on a distributed ledger technology or similar system. A key aspect of Article 12 is the concept of “control” over a CER. For a person to have control over a CER, they must satisfy specific conditions that demonstrate their ability to exercise exclusive rights with respect to that record. These conditions are outlined in RCW 62A.12-106. Generally, control is established if the person is the “registered owner” in a “transferable record” system, or if they can exercise exclusive rights over the CER through a “controlled-subsidiory” system that meets specific criteria, or if they have the ability to transfer the CER and prevent others from doing so. The Washington Act defines a controllable electronic record as an electronic record that can be provided to a transferable record purchaser by a person that has control over the record. The concept of “transferable record purchaser” is also crucial, referring to a person that acquires a controllable electronic record by purchase from the issuer or a transferable record owner. The Act aims to provide legal certainty for transactions involving digital assets that function similarly to traditional negotiable instruments or investment securities. The ability to unilaterally amend or revoke the record without the consent of the controller, or the existence of a prior enforceable claim to the record by another person that is not subject to the controller’s control, would negate the controller’s exclusive rights and thus prevent the establishment of control.

The Washington State Digital Asset Law, specifically the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) as adopted in Washington, governs how fiduciaries can access a user’s digital assets upon their death or incapacitation. The core principle is that a user’s intent, as expressed through a digital asset control document or the terms of service of a digital asset custodian, takes precedence. If no such document exists, the law outlines a hierarchy of access rights. A fiduciary, such as an executor or agent under a power of attorney, can request access from a digital asset custodian. The custodian must then provide notice to specific individuals, typically the next of kin or beneficiaries, and give them an opportunity to object. If no objection is received within a specified timeframe, or if an objection is overridden by a court, the fiduciary is granted access. The law distinguishes between types of digital assets and the nature of the fiduciary relationship. For example, a trustee generally has broader access rights than an agent under a limited power of attorney. The law also addresses situations where a digital asset custodian’s terms of service conflict with the user’s directives, generally favoring the terms of service unless the user has explicitly opted out or provided a control document. The scenario presented involves an executor attempting to access a deceased individual’s online accounts. The executor’s authority stems from the will and court appointment. However, the digital asset custodian’s terms of service, which the deceased agreed to, dictate the process. If the terms of service require a specific court order beyond the standard letters testamentary, or a specific digital asset control document that was not provided, the custodian can deny access. The absence of a specific digital asset control document means the default provisions of the RUFADAA, as interpreted by the custodian’s terms of service, will apply. Therefore, the custodian’s refusal based on their terms of service, which may require a separate court order for access to specific types of digital assets or if the executor’s standard authority is insufficient under their policy, is a valid basis for denial if no specific control document was executed by the user.

The Washington State Money Services Businesses Act (MSBA), codified in Revised Code of Washington (RCW) Chapter 19.60, defines and regulates entities engaged in money transmission. A key aspect of this act is determining when an entity’s activities constitute money transmission, thereby triggering licensing requirements. Digital assets, particularly those that can be exchanged for fiat currency or used as a medium of exchange, often fall under this purview. The Washington State Department of Financial Institutions (DFI) has issued guidance and interpretive statements clarifying the application of the MSBA to virtual currency businesses. Specifically, the DFI considers an entity to be engaged in money transmission if it receives money or monetary value for transmission to another location by any means, or if it issues or sells payment instruments or stored value. When a business facilitates the exchange of one virtual currency for another, or for fiat currency, and holds those assets in custody or control for the purpose of facilitating such exchanges on behalf of others, it is generally considered to be engaged in money transmission under Washington law. The critical factor is whether the entity is acting as an intermediary, holding or controlling assets for the purpose of facilitating their transfer or exchange for value. If a platform merely provides a venue for peer-to-peer transactions without holding or controlling the assets, it might not be considered a money transmitter. However, if the platform pools assets, manages wallets, or guarantees the exchange, it likely falls under the MSBA. Therefore, a business that operates a platform allowing users to buy, sell, and trade various cryptocurrencies, and in doing so, holds and controls these digital assets to facilitate such transactions, is considered a money services business and must obtain a license under RCW 19.60.

The Washington State Digital Asset Law, specifically RCW 11.120.010 et seq., governs the disposition of digital assets upon a person’s death. A digital asset is defined as an electronic record in which a person has a right or interest. This includes, but is not limited to, the contents of electronic mail, a file stored on a computer, or a digital representation of a financial asset. The law establishes a hierarchy of control for digital assets. A user may grant authority to a fiduciary or a designated person through an online tool or a will. If no such designation is made, the law outlines a default process. For assets held by a custodian (an entity that possesses or controls a digital asset), the custodian must provide a digital asset to the user’s personal representative. However, the custodian can refuse to provide access to a digital asset if it is reasonably believed that the user’s representative is not entitled to it. In this scenario, the user has explicitly designated Ms. Anya Sharma as their digital asset representative in their will. This testamentary designation supersedes any default provisions or general terms of service that might attempt to limit access for a designated representative, provided the will is validly executed under Washington law. Therefore, Ms. Sharma, as the designated representative, has the legal authority to access the user’s digital assets held by the custodian, subject to the custodian’s reasonable belief regarding her entitlement, which is established by the will. The law prioritizes explicit instructions from the user through their will.

The Washington State Digital Asset Act, codified under RCW 11.120.010 et seq., provides a framework for the management and distribution of digital assets upon a user’s death. A critical aspect of this act is the definition of a “digital asset” and the methods by which a user can grant access to these assets. The Act specifies that a user can grant access through a “provider’s terms of service” or through a “digital-asset control document.” A digital-asset control document is defined as a record that contains the user’s authenticated signature and grants authority to a specific person or entity to access, control, or dispose of the user’s digital assets. In this scenario, Ms. Anya Sharma created a separate, signed document specifically for her digital assets, clearly naming her brother, Mr. Vikram Sharma, as the custodian. This document, meeting the criteria of an authenticated signature and specific grant of authority, functions as a valid digital-asset control document under Washington law. The terms of service of the cloud storage provider, while potentially offering some access mechanisms, do not supersede a properly executed control document that explicitly designates a custodian. Therefore, Mr. Vikram Sharma’s authority stems directly from this dedicated, signed document, making it the legally operative instrument for accessing Ms. Sharma’s digital assets.

The Washington Uniform Common Interest Ownership Act (WUCIOA), codified in Revised Code of Washington (RCW) Chapter 64.34, governs the creation and management of common interest communities. While WUCIOA primarily addresses traditional real estate subdivisions and condominiums, its principles and the broader legal framework for property rights and digital assets in Washington are relevant. The Washington State Department of Financial Institutions (DFI) regulates financial activities, including those involving digital assets, under various statutes. The Securities Division of the DFI, for instance, can assert jurisdiction over digital assets if they are deemed securities. Washington’s approach to digital assets is evolving, with a focus on consumer protection and market integrity. The definition of a “security” under Washington’s Securities Act (RCW 21.20) is broad and can encompass digital assets that meet the criteria of an investment contract, such as the Howey Test. The question probes the regulatory oversight of a digital asset that functions as a form of fractional ownership in a physical asset. If this digital asset is structured such that purchasers expect profits derived solely from the efforts of others, it likely constitutes a security. In such a case, the issuance and sale of these digital assets would fall under the purview of the Washington State Securities Act, requiring registration or an exemption. The scenario specifically mentions fractional ownership of a tangible asset, which is a common characteristic of assets that might be classified as securities when tokenized. Therefore, the primary regulatory body with jurisdiction over the offering of such an asset, if it qualifies as a security, is the Washington State Department of Financial Institutions.

No calculation is required for this question as it tests conceptual understanding of Washington’s approach to digital asset regulation. The Washington State Money Transmitter Act (MTA), codified in Revised Code of Washington (RCW) Chapter 19.235, is the primary legislation governing the transmission of money, which has been interpreted to include certain digital assets. Under the MTA, entities engaged in the business of transmitting money, including those dealing with virtual currencies, are required to obtain a license. The definition of “money transmission” under RCW 19.235.010(12) is broad and includes receiving money for transmission or transmitting money, whether by electronic or other means. This definition has been interpreted by the Washington State Department of Financial Institutions (DFI) to encompass activities involving the exchange or conversion of virtual currencies, thus subjecting such activities to licensing requirements. The rationale behind this is to ensure consumer protection, prevent illicit activities, and maintain the integrity of the financial system. Therefore, an entity that facilitates the exchange of one virtual currency for another, or for fiat currency, within Washington State, is generally considered to be engaged in money transmission and subject to licensing under the MTA, unless specific exemptions apply. The DFI’s guidance and enforcement actions consistently reflect this interpretation, emphasizing that the underlying nature of the asset being transmitted or exchanged, rather than its form as a digital asset, determines the applicability of the MTA.

The Washington State Digital Asset Securities Act, specifically Revised Code of Washington (RCW) Chapter 21.37, defines a “digital asset” broadly to include any representation of value that is recorded on a distributed ledger or similar technology. This definition is intended to encompass a wide range of digital instruments, including cryptocurrencies, utility tokens, and security tokens. The Act’s primary purpose is to provide a regulatory framework for the issuance, sale, and trading of digital assets within Washington State, ensuring investor protection and market integrity. It clarifies that many digital assets may be considered securities under Washington law, thereby subjecting them to the state’s securities regulations, including registration requirements and anti-fraud provisions. The Act also addresses custody, transfer agents, and broker-dealers dealing with digital assets. The question hinges on understanding the scope of “digital asset” as defined by the Act, which is intentionally broad to adapt to evolving technologies. The definition includes assets that are transferable and represent value, regardless of their underlying technology or specific function, as long as they are recorded on a distributed ledger or similar system. Therefore, an asset that is a digital representation of value, recorded on a blockchain, falls squarely within the statutory definition of a digital asset in Washington.

The Washington State legislature enacted the Uniform Electronic Transactions Act (UETA) in 1999, which was later amended and is codified in Revised Code of Washington (RCW) Chapter 19.34. This act governs the use of electronic records and signatures in transactions. Specifically, RCW 19.34.020 defines “electronic signature” broadly to include “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.” This definition is critical because it encompasses a wide range of digital actions beyond a traditional pen-and-ink signature. The key element is the intent to authenticate the record. Therefore, a digital fingerprint, a unique cryptographic hash of a document associated with an individual’s private key, or even a typed name in a specific context can qualify as an electronic signature under Washington law, provided the intent to sign is present. The law emphasizes that an electronic signature has the same legal effect as a traditional signature. It is not about the specific technology used, but rather the intent and the logical association with the record.

The Washington State Money Transmitter Act (RCW 19.235) defines a money transmission business broadly, encompassing the transmission of money or monetary value for others. Digital assets, particularly those with utility or value that can be exchanged for fiat currency or other digital assets, fall under this definition when transmitted by a business. The core of the question revolves around whether a specific activity constitutes transmission for others, thereby triggering licensing requirements. In this scenario, the company facilitates the exchange of one digital asset for another, and crucially, it holds custody of these assets during the transaction and charges a fee for this service. This holding and facilitating of exchange for compensation is precisely what the Act aims to regulate to protect consumers and ensure financial stability. The Act’s scope is not limited to fiat currency but extends to “monetary value,” which digital assets clearly represent in many contexts. Therefore, the company’s operations, involving the holding and transfer of digital assets between parties for a fee, constitute money transmission under Washington law, necessitating a license. The rationale is to prevent illicit activities and ensure the integrity of financial transactions, even when conducted using novel forms of value.

No calculation is required for this question as it tests conceptual understanding of Washington’s approach to digital asset custody and the implications of the Uniform Commercial Code (UCC) as adopted in Washington. Washington State has adopted Article 12 of the UCC, which addresses “Control” over “Certificated Digital Assets” and “Uncertificated Digital Assets.” Under RCW 62A.12-106, a person has control of a certificated digital asset if the person obtains possession of the certificated digital asset. For an uncertificated digital asset, control is established when the person obtains control as defined in RCW 62A.12-107. This section outlines that a person has control of an uncertificated digital asset if the person is the issuer of the digital asset; has obtained an agreement with the issuer of the digital asset that the issuer will act on the person’s instructions regarding the digital asset; or has obtained control of a “digital asset account” in which the uncertificated digital asset is maintained. The key principle is the ability to direct the disposition of the digital asset without further action by the owner. Therefore, merely holding a private key without the ability to direct the issuer or a system participant with the authority to execute transactions on the ledger would not necessarily constitute control under Washington law if the underlying system does not recognize that private key as conferring such authority. The focus is on the legal recognition of the power to direct the asset’s movement or disposition.

The Washington State Money Transmitters Act (MTA), codified in Revised Code of Washington (RCW) Chapter 19.230, governs the business of transmitting money. Digital assets, particularly those with a medium of exchange function, can fall under the purview of this Act. The definition of “money transmission” in RCW 19.230.010(13) includes receiving money for transmission or transmitting money, or monetary value, to another location by any means. The critical element here is whether the digital asset constitutes “monetary value.” Washington’s approach, as seen in guidance and interpretations, tends to be broad, encompassing any asset that can be exchanged for goods or services or used as a store of value, even if not legal tender. Therefore, a platform facilitating the exchange of a digital asset for fiat currency or other digital assets, or enabling its transfer to another person, would likely be considered engaged in money transmission. The exemption in RCW 19.230.020(1)(b) for entities acting as a “legal or fiduciary representative” does not apply here as the scenario describes a commercial platform facilitating transactions, not a fiduciary role. Similarly, the exemption for entities solely providing software or hardware for money transmission (RCW 19.230.020(1)(e)) is not applicable because the platform is actively facilitating the transmission and exchange of the digital asset itself. The definition of “digital asset” in RCW 19.230.010(5) is broad, including virtual currencies and other forms of intangible personal property. The core of the analysis rests on whether the platform’s activities constitute the transmission of “monetary value” as defined and interpreted under Washington law. Given the broad definition of money transmission and digital assets, and the lack of a specific exemption for such activities, the platform would likely require a money transmitter license.

The Washington State Digital Asset Law, specifically the Uniform Fiduciary Access to Digital Assets Act (UFDAA) as adopted in Revised Code of Washington (RCW) Chapter 11.120, governs how fiduciaries can access a user’s digital assets upon their death or incapacitation. A key aspect of this law is the distinction between a user’s intent expressed in an online service’s terms of service and the user’s explicit digital estate plan. The law prioritizes a user’s explicit instructions over the terms of service of an online platform when determining access to digital assets. This means that if a user has created a digital estate plan that grants specific access rights to a fiduciary, those rights will generally supersede any conflicting provisions within the terms of service of a digital asset custodian, such as a cloud storage provider or social media platform. The law aims to provide clarity and control to individuals regarding their digital legacy. It also outlines the procedure for custodians to follow when presented with a valid request from a fiduciary, including the requirement to provide access to specific digital assets as directed by the user’s authenticated instructions. The law does not require a court order for a fiduciary to access digital assets if the user has provided proper authorization.

Washington’s Digital Asset Law, specifically the Uniform Fiduciary Access to Digital Assets Act (UFDAA) as codified in RCW 11.114, addresses how a fiduciary can access a user’s digital assets upon their death or incapacitation. The law distinguishes between digital assets that are stored by a third-party custodian and those that are not. For assets held by a custodian, the fiduciary’s access is primarily governed by the terms of service or an online tool provided by the custodian. The law prioritizes these contractual agreements and the custodian’s tools over a general power of attorney or a will, unless the terms of service explicitly allow for fiduciary access through those documents. Therefore, when a user designates a fiduciary in their online account settings, this is generally considered the most direct and effective method for granting access, as it aligns with the custodian’s established procedures and the intent of the UFDAA to respect these terms. The law aims to balance the user’s privacy with the need for their digital legacy to be managed. A user’s explicit instructions within the custodian’s platform for handling digital assets post-mortem, such as granting access to a designated fiduciary, are paramount.

No calculation is required for this question. The Washington State Uniform Commercial Code (UCC) Article 12, concerning Digital Assets, governs the rights and obligations related to digital assets. Specifically, RCW 62A.12-102 defines a “digital asset” broadly to include a “right to a digital asset.” RCW 62A.12-103 further clarifies that a person has “control” of a digital asset if the person has the ability to exercise substantially all the rights in the digital asset. The concept of “control” is paramount in determining who possesses enforceable rights over a digital asset, particularly in contexts such as transfer, security interests, and disposition. When a digital asset is held through a platform or intermediary, control is typically established by the ability to direct the disposition of the asset, which is often facilitated through the platform’s unique mechanisms for user interaction and asset management. This control is distinct from mere possession or access. The core principle is the power to unilaterally and effectively manage the digital asset’s lifecycle, including its transfer or deletion, without the need for consent from the platform or any other party, provided the user adheres to the platform’s terms of service which govern the operational framework of control. The definition of control in the Washington UCC aims to provide legal certainty in a rapidly evolving digital landscape, ensuring that rights in digital assets are clearly delineated and enforceable.

The Washington State Money Services Businesses Act (MSBA), codified in Revised Code of Washington (RCW) Chapter 19.104, defines and regulates entities engaged in money transmission. Digital assets, particularly those functioning as a medium of exchange or store of value, can fall under the purview of this act if transmitted. The key consideration for determining whether a digital asset activity constitutes money transmission under Washington law is whether the entity receives a digital asset for transmission to a person at the receiving end, with the understanding that the transmission is to be completed by forwarding the digital asset to a person other than the person making the transmission. This definition is broad and encompasses activities that may not involve traditional fiat currency. The MSBA requires entities engaged in money transmission to obtain a license from the Washington State Department of Financial Institutions (DFI). This licensing process involves demonstrating financial responsibility, background checks, and adherence to anti-money laundering (AML) and know your customer (KYC) requirements. The definition of “money transmission” under RCW 19.104.020(10) is critical here, as it includes receiving “money or monetary value for transmission.” The interpretation of “monetary value” is crucial in the context of digital assets. Washington’s approach, as seen in guidance and enforcement actions, generally treats digital assets that function as a medium of exchange or store of value as potentially falling within the scope of “monetary value” for money transmission purposes. Therefore, an entity that facilitates the exchange of one digital asset for another, or the transfer of a digital asset from one party to another, where the entity holds the digital asset during the transmission, is likely to be considered a money transmitter. The licensing requirement under RCW 19.104.020(1) mandates that no person shall engage in the business of money transmission in Washington without a license. Exemptions are narrowly construed and typically do not cover the core activities of digital asset exchanges or custodians that facilitate transfers.

The Washington State Money Services Businesses Act (MSBA), codified in Revised Code of Washington (RCW) Chapter 19.104, defines and regulates money transmission activities. A key aspect of this act is the licensing requirement for entities engaged in the business of transmitting money. Digital assets, particularly those that function as a medium of exchange or store of value, can fall under the purview of the MSBA if the transmission involves converting fiat currency to digital assets, or vice versa, or facilitating the transfer of digital assets for a fee. The definition of “money transmission” in RCW 19.104.020(10) is broad, encompassing the act of receiving money for transmission to another location by whatever means, or receiving money for the purpose of paying debts of the sender, or issuing stored value instruments. The Washington State Department of Financial Institutions (DFI) interprets and enforces this act. When an entity facilitates the exchange of fiat currency for a cryptocurrency, and then facilitates the transfer of that cryptocurrency to another party for a fee, it is engaging in a form of money transmission. The critical element is whether the activity involves the transmission of “money,” which under the MSBA can include instruments or stored value that represent money. The DFI has issued guidance clarifying that certain digital asset activities may be considered money transmission. Therefore, an entity that operates a platform enabling users to convert US dollars into Bitcoin and then send that Bitcoin to another user’s wallet, charging a service fee for each transaction, is likely considered a money services business under Washington law and requires a license. The fact that the transmission is in Bitcoin does not exempt it from the MSBA if the activity meets the functional definition of money transmission as interpreted by the DFI.

The Washington State Digital Asset Securities Act, codified in Revised Code of Washington (RCW) Chapter 21.37, defines a “digital asset security” as a digital representation of value that is registered or has a fixed maturity date and is commonly known in the financial community as a bond, note, or other obligation, or that represents an interest in or a direct obligation of a business enterprise, or that is a security as defined by federal law. This definition is crucial for determining which digital assets fall under the purview of Washington’s securities regulations. The Act aims to provide a clear regulatory framework for digital assets that function as securities, ensuring investor protection and market integrity within the state. It distinguishes these from other types of digital assets, such as cryptocurrencies used purely as a medium of exchange or utility tokens. The core principle is to apply existing securities law principles to digital asset forms when they exhibit characteristics of traditional securities. Therefore, a digital asset that represents a fractional ownership interest in a real estate development project, where profits are distributed based on the success of the project, would likely be considered a digital asset security under RCW 21.37. This is because it represents an investment contract, a common indicia of a security, and is a digital representation of value tied to an enterprise’s success.

The Washington State Uniform Commercial Code (UCC) Article 12, concerning control of digital assets, is foundational here. Specifically, Revised Code of Washington (RCW) 62A.12-101 et seq. defines a “digital asset” and outlines the legal framework for its transfer and control. A key concept is “control,” which, for a digital asset, is akin to possession or dominion over a tangible asset. Under RCW 62A.12-102, control is established when a purchaser has the ability to exercise all rights in the digital asset. This is achieved through various means, including the ability to obtain exclusive custody and exercise all rights, and by having the exclusive power to transfer the asset. When a digital asset is held in a distributed ledger technology (DLT) system, such as a blockchain, and a purchaser acquires a cryptographic key that provides exclusive access and control over that asset, and the system design prevents any other party from unilaterally transferring or altering the asset without the purchaser’s consent, the purchaser has achieved control. This scenario aligns with the definition of control under the Washington UCC, enabling the purchaser to exercise all rights associated with the digital asset.

The Washington State Money Transmitters Act (RCW 19.230) defines a money transmitter as any person who engages in the business of receiving money for transmission to a location outside this state or for deposit elsewhere. This definition is broad and can encompass entities that facilitate the transfer of value, including certain digital assets. The core of the analysis lies in whether the entity’s activities involve the transmission of monetary value. Washington’s approach, as seen in its regulatory framework for money services businesses, generally requires licensing for entities that act as intermediaries in the transfer of funds or monetary equivalents. Specifically, if a platform facilitates the conversion of fiat currency to digital assets and then to another fiat currency, or the transfer of digital assets between different parties for a fee, it is likely to be considered a money transmitter. The Washington State Department of Financial Institutions (DFI) has issued guidance and interpretations that clarify these activities. For instance, if a service allows users to purchase digital assets with USD and then send those digital assets to another user’s wallet, and the service derives revenue from transaction fees or spreads, it falls under the purview of the Act. The key is the business of receiving money or monetary value for transmission. The specific wording of RCW 19.230.010(11) is crucial, defining a “money transmitter” as a person who engages in the business of receiving money for transmission. The interpretation of “money” in this context has evolved to include digital assets that function as a medium of exchange. Therefore, a platform that enables peer-to-peer transfer of digital assets, where the platform controls the movement of value and charges a fee, is operating as a money transmitter. The absence of a specific digital asset exemption in the initial phrasing of the Act, coupled with subsequent regulatory interpretations, points towards the necessity of a money transmitter license for such operations in Washington.