Kentucky SB155, the 2022 Amendments to the Uniform Commercial Code to Accommodate Emerging Technologies, passed the Kentucky House on March 21, 2024, and is expected to be signed by Governor Andy Beshear. The Amendments are effective January 1, 2025. View SB155 here. This is a positive shift for secured lenders, providing guidelines and certainty for addressing emerging technologies and new forms of collateral.
The Amendments are sometimes described only as Article 12 but they span the full breadth of the UCC. Among the other revisions, there is a uniform definition of “sign” in Article 1 that includes electronic signatures, Article 3-604 is revised to prevent the destruction of an instrument, e.g., a truncated check, from being a discharge of an obligation represented by the instrument, and Article 9 is revised to work with all forms of digital assets, not just crypto currencies.
Article 12, the most significant of the Amendments, creates a new type of collateral, Controllable Electronic Records. CERs can take several forms, including cryptocurrencies, non-fungible tokens, and other types of personal property that exist only as electronic records. Bringing digital property within the scope of the UCC provides lenders with outcome certainty in commercial transactions involving digital assets; a requisite of facilitating commerce.
Please contact MPM for more information and assistance with form document revisions. MPM’s John McGarvey serves as chairperson of the Uniform Law Commission’s UCC Committee.
