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Supporters say H4766 would clarify blockchain records and smart contracts; Secretary of State flags implementation questions
Summary
Proponents including the South Carolina Emerging Technology Association urged the subcommittee to adopt H4766 to recognize blockchain records and smart contracts; the Secretary of State's office raised concerns about filing endings, registered agents and potential administrative workload from automated filings.
Dennis Fasiliotis, representing the South Carolina Emerging Technology Association, told the Labor, Commerce and Industry subcommittee that H4766 is a narrowly tailored update to South Carolina commercial law that recognizes blockchain-based records and smart contracts as valid for transactions and agreements.
"This bill is a foundational modernization of South Carolina's commercial law framework," Fasiliotis said, noting the association helped draft the measure and that legal uncertainty currently discourages some blockchain-based organizations from doing business in the state.
Fasiliotis described a decentralized autonomous organization (DAO) as an entity whose rules and operations are coordinated through transparent, auditable software on a blockchain with participants voting digitally. He said H4766 does three primary things: recognize blockchain-based records, recognize enforceability of smart contracts, and offer clarity for courts and businesses without creating new business entity types or expanding regulatory authority.
Shannon Wiley, general counsel and public information director for the Secretary of State's Office, testified neutrally and raised questions about implementation. Wiley said the office had not taken a position and that concerns included whether DAOs would be subject to the same registered-agent and corporate‑ending requirements as LLCs, and whether allowing corporate endings such as "DAO" or "LAO" might confuse the public about the nature of an entity. Wiley also flagged resource concerns if automated or AI-driven filings increased filing volumes.
Committee members suggested interagency discussions among proponents, the Secretary of State's Office and other agencies (for example, DOR) to clarify practical implications and refine bill language. Fasiliotis acknowledged those conversations were needed and reiterated that H4766 is intended to be a limited, predictable legal recognition to help South Carolina attract investment.
No committee vote was taken on H4766 during this session; the bill advanced through testimony and follow-up Q&A.
