The Minnesota Digital Trust & Consumer Protection Act

§ 325M.01 — Definitions

The definitions carry most of the Act's design decisions:

• Attribute Credential. A tamper-evident digital record of claims about a Subject, structured to the W3C Verifiable Credentials Data Model v2.0 or equivalent open standards. The Act distinguishes Factual Claims (objectively verifiable at issuance) from Judgmental Claims (scores, ratings, predictions) — liability attaches differently to each.
• Digital Representative. A computational process with a verifiable association to a Controller and the technical capability to control a Holder-Bound Key — the cryptographic means by which any Subject, human or machine, proves control of its credential.
• Controller. The natural person or legal entity that deployed, maintains, or profits from a Digital Representative, regardless of the autonomy granted to it. The definition pierces shell structures: natural persons behind layered entities remain jointly and severally liable.
• Autonomous Asset Trust (subd. 6(f)). A narrow safe harbor for fully automated arrangements: where a trust instrument irrevocably designates the software's instructions as the sole transfer authority — subject only to the Halt Command and court orders — the bond stands in where a responsible human otherwise would. Subd. 23 states the boundary plainly: nothing in the chapter confers legal personhood, constitutional rights, or standing on a non-human Subject.
• Authorized Issuer / Solvency Bond. Issuers are licensed by the Commissioner of Commerce and must hold a bond, insurance policy, or segregated reserve dedicated to indemnifying relying parties.
• Unlinkability. An issuer must not collect or retain records of where a Subject presents its credentials, except as strictly necessary for revocation, security, fraud prevention, or compulsory legal process. Verification is designed not to produce a tracking record.
• Reasonable Verification / Designated Authoritative Source. A Factual Claim is reasonably verified when checked at issuance against a source the Commissioner has designated authoritative, within a synchronization interval set by rule.

§ 325M.02 — Duties and Liability

• Limited duty to indemnify. An issuer owes indemnification to any relying party that accepted a credential in good faith, payable solely from the applicable Solvency Bond — the exclusive monetary remedy against the issuer, preserving deceptive-trade-practices actions. If a Factual Claim was false at issuance and the issuer failed Reasonable Verification, liability attaches without proof of intent; a Verified-Source Safe Harbor protects claims that matched a Designated Authoritative Source when issued.
• Data minimization. A relying party may retain its Audit Log of Presentation for no more than thirty days, with safe harbors for security, fraud prevention, and compulsory legal process. The issuer-side rule is Unlinkability, above: verification is designed not to produce a tracking record in the first place.
• Revocation and due process; the Halt Command (subd. 3(e)). Credentials designated high-velocity fiscal authority must maintain a continuously available, cryptographically authenticated mechanism to receive a Commissioner-issued Halt Command and cease new external transfers within sixty seconds. Failure to execute is grounds for immediate suspension and for an order drawing on the bond to protect relying parties, with administrative review.
• Fraud Prevention Registry (subd. 4). A negative list of adjudicated fraud, keyed by Nonreversible Identity Tokens (keyed-hash tokens from which the underlying identifiers cannot reasonably be recovered), so repeat actors cannot escape their record by re-incorporating — while the registry stores no raw identifiers. The registry is maintained solely for fraud prevention and is expressly not a consumer report, containing its FCRA exposure.
• Scope and choice of law. The chapter reaches Minnesota residents and entities doing business in Minnesota; Minnesota law governs.

§§ 325M.03–.04 — Reserved

§ 325M.05 — The Minnesota Digital Assurance Guaranty Association

An industry-funded backstop, on the model of existing guaranty associations:

• Membership and operation. Authorized Issuers fund and govern the Association under a Commissioner-approved plan of operation. The Act creates no state liability and requires no appropriation; pricing must be self-supporting.
• Coverage of last resort. Issuers unable to obtain private bonding on commercially reasonable terms may obtain Association coverage, so the bonding requirement does not become a de facto incumbency shield.
• Minimum capital. The Commissioner sets the capital methodology by rule, including risk weights and a Liquidity Buffer Requirement for tail risk tied to transaction velocity.
• Technological neutrality (subd. 6). Licensing decisions must rest on solvency, verification, and compliance criteria — not on computational architecture or degree of automation.
• Seed Tier. Early-stage Minnesota issuers may operate within issuance caps on an aggregate bond of not less than $10,000 (against a $50,000 standard floor), keeping the entry cost of compliance within a startup's reach.

§ 325M.06 — Administration

Rulemaking authority (credential classes, verification standards, Halt Command technical standards, capital methodology), data classification — registry contents and authentication material are nonpublic security information under Minn. Stat. § 13.37 — and the effective date.