Utah Code 78B-3-112. Action for mistaken or fraudulent transaction on a reversible blockchain
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(1) As used in this section:
Terms Used In Utah Code 78B-3-112
- Administrator: includes "executor" when the subject matter justifies the use. See Utah Code 68-3-12.5
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: means :(24)(a) an individual;(24)(b) an association;(24)(c) an institution;(24)(d) a corporation;(24)(e) a company;(24)(f) a trust;(24)(g) a limited liability company;(24)(h) a partnership;(24)(i) a political subdivision;(24)(j) a government office, department, division, bureau, or other body of government; and(24)(k) any other organization or entity. See Utah Code 68-3-12.5
- Plaintiff: The person who files the complaint in a civil lawsuit.
- United States: includes each state, district, and territory of the United States of America. See Utah Code 68-3-12.5
(1)(a) “Blockchain” means a digital ledger of transactions:(1)(a)(i) that is distributed across multiple nodes;(1)(a)(ii) that is mathematically verified; and(1)(a)(iii) where the validity of transactions is maintained by consensus of nodes.(1)(b) “Blockchain administrator” means a person that is responsible for maintaining and overseeing a blockchain.(1)(c) “Division” means the Division of Consumer Protection created in Section 13-2-1.(1)(d) “Fraudulent transaction” means a transaction that a person undertakes with the intent to deceive another person, including a transaction that involves:(1)(d)(i) false representation;(1)(d)(ii) omissions of material fact; or(1)(d)(iii) the use of a false or stolen identity.(1)(e) “Node” means a computer connected to a blockchain.(1)(f) “Proof of identity” means government-issued identification that contains the following information:(1)(f)(i) a person’s name;(1)(f)(ii) an individual’s date of birth;(1)(f)(iii) a person’s address, which is:(1)(f)(iii)(A) for an individual, a residential or business street address;(1)(f)(iii)(B) for an individual who does not have a residential or business street address, a Post Office box number or the residential or business street address of next of kin or of another contact individual; or(1)(f)(iii)(C) for a person other than an individual, the principal place of business; and(1)(f)(iv) an identification number, which is:(1)(f)(iv)(A) for a United States person, a taxpayer identification number; or(1)(f)(iv)(B) for a non-United States person, a taxpayer identification number, passport number and country of issuance, alien identification card number, or the number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard.(1)(g) “Reversible blockchain” means a blockchain that:(1)(g)(i) requires the blockchain’s users to:(1)(g)(i)(A) provide proof of identity to the blockchain administrator;(1)(g)(i)(B) acknowledge and agree that all transactions occurring on the blockchain are subject to reversal by a sheriff node; and(1)(g)(i)(C) agree to be subject to jurisdiction of a court in Utah; and(1)(g)(ii) requires the blockchain administrator to:(1)(g)(ii)(A) verify a user’s identity by checking the user’s proof of identity against government-issued identification databases; and(1)(g)(ii)(B) maintain records of a user’s proof of identity for a minimum of five years.(1)(h) “Sheriff node” means the same as that term is defined in Section 67-5-39.(1)(i) “Transaction” means the transfer of digital assets, rights, privileges, or obligations from one person to another that occurs on a blockchain.(1)(j)(1)(j)(i) “User” means a person that interacts with a blockchain.(1)(j)(ii) “User” includes a person that is:(1)(j)(ii)(A) sending or receiving transactions;(1)(j)(ii)(B) accessing data stored on the blockchain;(1)(j)(ii)(C) participating in consensus or governance mechanisms;(1)(j)(ii)(D) running a node on the blockchain;(1)(j)(ii)(E) interacting with smart contracts or decentralized applications; or(1)(j)(ii)(F) holding or managing digital assets.
(2) A plaintiff may bring a cause of action against a person to reverse:
(2)(a) a fraudulent transaction if:
(2)(a)(i) the transaction occurred on a reversible blockchain;
(2)(a)(ii) the plaintiff entered into the transaction with reasonable reliance on the person’s:
(2)(a)(ii)(A) fraudulent representation;
(2)(a)(ii)(B) omission of material fact; or
(2)(a)(ii)(C) use of a false or stolen identity; and
(2)(a)(iii) the plaintiff was injured as a result of that reasonable reliance; or
(2)(b) a mistaken transaction if:
(2)(b)(i) the transaction occurs on a reversible blockchain;
(2)(b)(ii) the transaction resulted in a transfer of assets:
(2)(b)(ii)(A) to the wrong recipient; or
(2)(b)(ii)(B) in the wrong amount; and
(2)(b)(iii) the recipient’s refusal to return the assets resulted in the unjust enrichment of the recipient.
(3) Upon a finding of a mistaken or fraudulent transaction, the court shall issue an order to the Office of the Attorney General to reverse the transaction in accordance with Section 67-5-39.