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SD 2398

An Act establishing regulations on certain virtual currencies for fraud prevention

194th Legislature (2025-2026) Introduced by Barry Finegold

Massachusetts requires licensing, registration, quarterly location reporting, and clear disclosures for virtual currency kiosks to curb fraud and protect consumers.

House concurred
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WeVote Research Nonpartisan
Bill Summary · SD 2398

Summary: Bill SD 2398 – An Act establishing regulations on certain virtual currencies for fraud prevention

Status: House concurred

Introduced: February 27, 2025

Bill Overview
SD 2398 adds a new regulatory framework for virtual currency kiosks in Massachusetts. The measure seeks to curb fraud and enhance consumer protection by requiring licensing, registration, location reporting, and robust disclosures for operators that facilitate the exchange of virtual currencies at physical kiosks within the Commonwealth.

Key Provisions

  • New Section: Virtual Currency Kiosks (Chapter 167B, Sec. 25)

    • Purpose: Regulate kiosk-based virtual currency activity to prevent fraud and protect consumers.

  • Definitions (selected)

    • Blockchain; blockchain analytics and software
    • New customer: an individual who has never transacted with the operator; remains new for at least 30 days after the first transaction
    • Virtual currency kiosk: electronic terminal enabling exchange of virtual currency for fiat, bank credit, or other currency
    • Virtual currency kiosk operator: person conducting virtual currency business via a Commonwealth-based money transmission kiosk
    • Virtual currency kiosk transaction and virtual currency wallet

  • Licensing and Registration

    • A kiosk operator may not conduct or advertise virtual currency business unless licensed as a money transmitter under existing chapters (167F, 169, or 169A) and compliant regulations.
    • Operators must not locate a kiosk without registering the money transmission kiosk and obtaining prior approval from the Commissioner.

  • Location Reporting

    • Operators must submit quarterly location reports for all kiosks within 45 days after the end of each calendar quarter.
    • Reports must include: legal name, any fictitious/trade name, kiosk address, start/end operation dates, and any associated virtual currency addresses.

  • Consumer Disclosures and Notices

    • Disclosures must be clear, conspicuous, and provided in the customer’s chosen language.
    • Required disclosures include:
    • A prominent warning: “LOSSES DUE TO FRAUDULENT OR ACCIDENTAL TRANSACTIONS ARE NOT RECOVERABLE… TRANSACTIONS IN VIRTUAL CURRENCY ARE IRREVERSIBLE.”
    • Material risks, liability for unauthorized transactions, irrevocability of certain transfers, and that some transactions are recorded on a public ledger with potential timing differences.
    • Dollar amount and virtual currency amount for the transaction; any fees and exchange rates.
    • Daily transaction limit of up to $1,000 for new customers.
    • Change notices to rules/policies; owner contact details and consumer assistance channels.
    • Circumstances under which account information may be disclosed to third parties without a court/government order.
    • Acknowledgement: customers must confirm receipt of disclosures (consent).

  • Transaction Transparency

    • Each completed transaction must be documented with the relevant disclosures and terms.

Who Is Affected
- Virtual currency kiosk operators and their affiliates
- Consumers using virtual currency kiosks in Massachusetts
- The Massachusetts Commissioner of Banks/Financial Services regulating money transmitters

Timeline and Procedural Notes
- Initial filing date: January 17, 2025 (Senate Docket No. 2398)
- Status: referred to Financial Services committee on Feb 27, 2025; subsequently House concurred
- Provisions imply ongoing compliance upon enactment, with regular quarterly reporting and ongoing licensing/approval requirements

Potential Impact
- Strengthened consumer protections for kiosk-based virtual currency transactions
- Increased regulatory oversight of physical-location virtual currency activity
- Possible compliance costs for kiosk operators (licensing, registration, quarterly reporting, disclosures)
- Clarity for consumers on risks, fees, limits, and rights relating to virtual currency transactions

Note: The bill text provided is partial beyond the disclosures section; the summary reflects the substantive provisions presented.

Compiled from official sources — confirm details with the bill’s official record.

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