Committee hears large UCC update to add rules for digital assets and 'controllable electronic records'

Lawyers and uniform-law drafters told the Senate Labor and Commerce Committee on March 13 that Senate Bill 252 would modernize Alaska's Uniform Commercial Code, including a new Article 12 to govern 'controllable electronic records' (CERs) such as certain cryptocurrencies and other digital assets.

Carly Dennis, staff to Senator Klayman, described the bill as incorporating recommendations from the Uniform Law Commission and the American Law Institute from 2018 and 2022. Ben Orzezewski, legislative counsel for the Uniform Law Commission, explained that Article 12 provides rules for proving who has control of a CER, makes CERs negotiable so good-faith purchasers can rely on the finality of transactions, and updates definitions and transition rules to protect parties who entered transactions under earlier rules.

Senator Dunbar asked a policy question about whether state law should use its authority to 'secure' assets rooted in a philosophy that prefers less government involvement; Orzezewski responded that drafters took a practical approach because these assets exist today, and the amendments are intended to reduce litigation and make judgments enforceable by clarifying control and negotiability.

The committee set the bill aside for further consideration after the presentation and Q&A.