Legislation aimed at regulating cryptocurrency kiosks has successfully advanced through both chambers of the Virginia legislature. This bill is now poised for the governor’s approval, which could introduce significant changes to how cryptocurrency kiosks operate within the state.
Key Provisions of the Virginia Cryptocurrency Kiosk Bill
If signed into law, the new legislation will establish statewide guidelines for kiosk operators. These guidelines will include:
- Mandatory licensing and reporting requirements
- Prohibition on marketing kiosks as ATMs
- New consumer protections to reduce scams
Delegate Michelle Maldonado, who represents Virginia’s 20th House District, sponsored the bill due to a rising number of scam incidents involving these kiosks. She cited specific cases, including one individual from Southwest Virginia who lost $15,000 through such a scam.
Consumer Safeguards Against Cryptocurrency Scams
The proposed legislation aims to implement several measures to safeguard consumers:
- Daily and monthly transaction limits
- A 48-hour hold for new users to facilitate refunds in case fraud is suspected
- ID verification for all transactions
- Clear warning notices regarding potential risks
Maldonado pointed out the confusion surrounding these kiosks, especially since they resemble ATMs but only facilitate cryptocurrency purchases. Scammers often exploit this resemblance, leading victims to believe they need to make transactions to resolve issues like debts or legal problems. In some regions, victims have lost significant amounts, with reports indicating losses of up to $250,000.
Industry Accountability and Education
The legislation further mandates that kiosk operators register with the state, pay necessary fees, and cap the fees that can be charged to consumers. Operators will also be required to provide refund mechanisms for funds available for withdrawal.
Currently, scams comprise about 7% of the business conducted through crypto kiosks. Maldonado emphasized the need for proactive regulatory measures to prevent this percentage from increasing. According to AARP Virginia, the need for these regulations is urgent, especially given that older adults are prime targets for these scams.
The introduction of this bill reflects a growing awareness of the risks associated with cryptocurrency kiosks and a commitment to protecting consumers in the Commonwealth.
