New York and Ohio have joined the growing number of states adopting the 2022 amendments to the Uniform Commercial Code (UCC), bringing significant changes to the legal framework governing secured transactions involving digital assets and other forms of electronic commerce. New York’s amendments took effect June 3, 2026, while Ohio’s amendments take effect October 7, 2026. Together, these developments reflect the continued nationwide shift toward a more consistent commercial law framework for transactions involving emerging technologies.
For businesses, lenders and other market participants, the amendments provide greater clarity around the ownership, transfer and collateralization of digital assets, including cryptocurrencies, non-fungible tokens (NFTs) and certain electronic payment rights. Among the most significant changes is the creation of a new Article 12 governing “controllable electronic records,” along with corresponding revisions to Article 9 that affect how security interests in certain digital assets can be perfected and prioritized.
The primary purpose of the 2022 UCC Amendments is to modernize the UCC for an increasingly digital economy. The original UCC framework was designed largely around tangible property and traditional forms of commercial transactions. While the existing code successfully accommodated many electronic transactions, it lacked clear rules governing ownership, transfer, and collateralization of digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and certain electronic payment rights. The 2022 amendments seek to fill these gaps by establishing a comprehensive legal framework for digital assets while preserving the UCC’s core principles of certainty, negotiability, and commercial efficiency.
A New Article 12: Controllable Electronic Records
The centerpiece of the amendments is the creation of a new Article 12, titled “Controllable Electronic Records.” Article 12 introduces a new category of property known as a controllable electronic record, or “CER.” Broadly speaking, a CER is an electronic record that can be subjected to “control,” a concept analogous to possession of tangible property. Cryptocurrencies, blockchain-based tokens, electronic promissory notes, and certain other digital assets are expected to fall within the definition of CERs.
Article 12 establishes rules for determining ownership rights in CERs and provides protections for purchasers who acquire control of such assets in good faith. The amendments create the concept of a “qualifying purchaser,” similar to the holder-in-due-course doctrine applicable to negotiable instruments. A qualifying purchaser who acquires control of a CER for value, in good faith, and without notice of competing claims generally takes the asset free of certain adverse property claims. This framework is designed to promote certainty and liquidity in digital asset markets by allowing parties to rely on apparent ownership and control.
Perfection by Control Under Article 9
The amendments also significantly revise Article 9, which governs secured transactions. Prior to the amendments, most digital assets were treated as general intangibles, and lenders typically perfected security interests through the filing of financing statements. The new framework introduces “control” as a method of perfection for many digital assets and gives perfected-by-control security interests superpriority over parties who have perfected by filing alone. This change reflects the practical realities of digital assets, where the party with control of a cryptographic key or digital wallet often has effective dominion over the asset itself. As a result, lenders and other secured parties may increasingly seek control arrangements rather than relying solely on public filings.
Clearer Choice-of-Law Rules for Digital Assets
Another important feature of the amendments is the establishment of clearer choice-of-law rules for digital assets. Traditional UCC choice-of-law provisions were often difficult to apply to decentralized blockchain-based assets that lack a clear physical location. Article 12 introduces a framework for determining the governing law applicable to a controllable electronic record, including default rules when no governing law can otherwise be identified. These provisions are intended to reduce uncertainty in cross-border and multijurisdictional transactions involving digital assets.
Beyond digital assets, the amendments make numerous revisions throughout the UCC to recognize electronic records and emerging technologies. Various articles have been updated to accommodate electronic documents, electronic money, and hybrid transactions involving both goods and services. The amendments also clarify rules governing electronic transferable records and other forms of digitized commercial documentation. These changes are intended to ensure that the UCC remains technology-neutral and capable of supporting future innovations in commerce and finance.
Why New York’s Adoption Matters
New York’s adoption is particularly significant because New York law is frequently chosen as the governing law for major financing transactions, securities offerings, and commercial agreements. Market participants have long expressed concern that New York’s failure to adopt the 2022 amendments could create inconsistencies with other jurisdictions and complicate transactions involving digital assets. By enacting the amendments, New York is among thirty-six other states (including the District of Columbia) that have adopted the updated framework, helping to promote greater uniformity across U.S. commercial law.
The amendments do not regulate digital assets themselves. Questions relating to securities regulation, commodities regulation, taxation, anti-money laundering requirements, and money-transmission laws remain governed by other bodies of law. Instead, the amendments focus on private-law issues, including ownership, transfer, secured lending, and commercial rights among market participants. In this respect, the amendments function as infrastructure legislation, creating the legal foundation necessary for digital asset markets to operate with greater certainty and predictability.
As digital assets continue to become integrated into mainstream finance, the New York amendments are likely to play an increasingly important role in commercial practice. By recognizing controllable electronic records, modernizing secured transaction rules, and clarifying legal rights in digital assets, the amendments position New York to remain a leading jurisdiction for financial innovation while preserving the stability and predictability that have long characterized its commercial law system.
Ohio’s Recent Enactment and What it Means for Ohio Transactions
In Ohio, Governor Mike DeWine signed the UCC 2022 amendments into law on July 7, 2026, with an effective date of October 7, 2026. The transition to the 2022 amendments will balance immediate enforceability for new transactions with a protective grace period to shield existing deals from being invalidated. This means that transactions entered into legally before October 7, 2026 will remain valid and enforceable under the old rules, but new transactions will need to be compliant with the updated UCC in order to preserve lender priority in Article 12 assets.
Immediate Effectiveness for New Transactions:
- Effective Date: October 7, 2026
- New Deals: Any commercial transaction, digital asset financing, or security interest created after this effective date must strictly comply with the new rules (such as establishing “control” over a cryptocurrency or NFT to achieve super-priority status).
Validation of Pre-Effective Date Transactions:
- Retroactive Safe Harbor: Transactions entered into legally before the effective date remain valid and enforceable under the old rules.
- Priority Preservation: If a secured party perfected a lien under previous law (e.g., by filing a general UCC-1 financing statement covering general intangibles) before October 2026, that perfection generally remains intact for a designated adjustment period.
Adjustment and Grace Period:
- Contract Renegotiation: The law provides a transition window specifically designed to allow lenders and borrowers to review outstanding loan agreements.
- Upgrading Security Interests: Because the new Article 12 introduces “control” as the superior method to perfect security interests in CERs, parties can use this period to amend their loan documents. This ensures a lender’s priority isn’t leaped by a subsequent creditor who gains control of the digital collateral.
Changes to Filing UCC-1 Financing Statements:
- New Collateral Terminology: While the submission method will remain the same, collateral descriptions will need to use the newly codified asset categories in financing statements. To perfect an interest via by filing, descriptions should explicitly mention “Controllable Electronic Records”, “controllable accounts” or “controllable payment intangibles”.
- Control vs. Filing: Filing a UCC-1 financing statements remains a valid method to perfect a security interest in digital assets under Article 9. However, filing alone no longer grants top-tier priority. Under the new rules, a secured party who perfects by obtaining “control” over the CER takes absolute priority over a lender who only filed a UCC-1 financing statement.
For questions about how the 2022 UCC amendments affect your existing loan documents, digital asset collateral, or upcoming financing transactions in New York or Ohio, contact KJK partner Jessica Groza (JLG@kjk.com).