Bill
SD 2006
Creates a new regulatory framework for Massachusetts virtual currency kiosks, requiring compliance, records, and pre-transaction risk disclosures to protect consumers.
Status and basic facts
- Bill number: SD 2006 (Senate Docket No. 2006)
- Title: An Act providing for regulation and reporting requirements for qualifying virtual currency kiosk operators
- Introduced: February 27, 2025
- Filed: January 17, 2025
- Status: House concurred (as of the provided information)
- Legislative action shown: Referred to the Committee on Financial Services (February 27, 2025)
Overview
SD 2006 proposes creating a new regulatory framework (Chapter 169C) to govern operators of virtual currency kiosks in Massachusetts. The act would establish definitions, confidentiality rules, compliance requirements, and customer disclosures to regulate and oversee the operation of kiosks that exchange fiat currency for virtual currency (and vice versa).
Key provisions and requirements
- New regulatory chapter: The bill would insert Chapter 169C after Chapter 169A of the General Laws, establishing the Massachusetts regulation of virtual currency kiosk operators.
- Definitions: The act provides specific terminology to be used in the chapter, including:
- Virtual currency kiosk operator
- Virtual currency kiosk
- Virtual currency
- Digital wallet and digital wallet address
- Blockchain analytics
- Bank Secrecy Act (BSA) and USA PATRIOT Act references
- Division and Commissioner (Massachusetts Division of Banks and its Commissioner)
- NMLS (licensing registry for financial services)
- Confidentiality and public records:
- Information collected from virtual currency kiosk operators by the Department would generally be confidential and not subject to disclosure under the Massachusetts Public Records or FOIA processes.
- Certain information would be publicly accessible, including the operator’s name, business address, telephone number, unique identifier, registered agent, and final Department orders relating to violations.
- Federal law alignment:
- If any provision of the act conflicts with federal law (e.g., BSA or PATRIOT Act), the federal law would govern to the extent of the inconsistency.
- Compliance and enforcement:
- The Secretary may request evidence of compliance and related records as needed to administer and enforce the act and applicable law (including BSA and PATRIOT Act).
- Virtual currency kiosk operators must provide records reasonably required to ensure compliance.
- Customer risk disclosure (pre-transaction):
- Before entering into an initial transaction with a customer, each operator must disclose in clear, conspicuous, legible English all material risks associated with using the kiosk, typically in terms of service or comparable disclosure language.
Potential impact and scope
- Regulatory oversight: The act would place virtual currency kiosk operators under the supervision of the Massachusetts Division of Banks, with reporting and recordkeeping requirements that parallel existing financial services regulation.
- Compliance costs: Operators may face licensing/registration obligations, ongoing reporting, and the cost of maintaining records and analytics capabilities (including potential use of blockchain analytics to assess risk).
- Consumer protections: The pre-transaction risk disclosure requirement would aim to inform customers of material risks before transactions.
- Data handling: The confidentiality provisions balance protection of operator information with public disclosure of certain identifying details and final enforcement actions.
Observations and drafting notes
- There appears to be an inconsistency in the draft text: the definition of “Virtual currency kiosk operator” references entities “qualified to do business in the State of Illinois,” and references a Secretary of the Illinois Department of Financial and Professional Responsibility. If this bill is intended for Massachusetts, those references may reflect drafting error and would likely be amended to align with Massachusetts agencies (e.g., Division of Banks and Massachusetts Secretary or appropriate department). Readers should watch for amendments clarifying the Massachusetts-specific agencies and scope.
Bottom line
SD 2006 would create a formal regulatory regime for Massachusetts virtual currency kiosks, including definitions, confidentiality rules, compliance obligations, and customer risk disclosures. The bill would require operators to provide records to authorities, align with federal anti-money-laundering laws, and publish certain information publicly, while restricting broad disclosure of confidential examination details. The drafting notes suggest a potential inconsistency to be addressed in subsequent amendments.
Compiled from official sources — confirm details with the bill’s official record.
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