WeVote
Log In

Bill

Bill

A 3386

Establishes "Virtual Currency Kiosk Consumer Protection Act."

2026-2027 Regular Session Introduced by Sterley Stanley

Regulates virtual currency kiosks by licensing operators as money transmitters, requiring consumer protections, disclosures, fraud prevention, compliance staffing, and quarterly lo

Introduced, Referred to Assembly Science, Innovation and Technology Committee
0
WeVote Research Nonpartisan
Bill Summary · A 3386

Overview

A 3386, from New Jersey's 222nd Legislature, establishes the Virtual Currency Kiosk Consumer Protection Act. The bill creates a comprehensive regulatory framework for operating virtual currency kiosks in the state, emphasizing consumer disclosures, fraud prevention, compliance staffing, licensing as money transmitters, and location reporting. It aims to standardize notices, protections, and safety requirements to safeguard consumers while supporting innovative business practices.

Main purpose and intent

  • Standardize notices, disclosures, and consumer protections for virtual currency kiosks.
  • Ensure safety and soundness so consumers’ funds are protected.
  • Align state law with federal requirements (Bank Secrecy Act and USA PATRIOT Act) where applicable.
  • Require licensing as money transmitters for kiosk operators and robust internal controls.

Key provisions and changes

  • Definitions:

    • Virtual currency kiosk: an electronic terminal enabling fiat↔virtual currency exchanges or exchanges between virtual currencies, with a conspicuous notice that it is not an ATM dispensing USD.
    • Virtual currency: broad definition including centralized or decentralized digital units used as payment or stored value, excluding certain gaming or loyalty program currencies.

  • Disclosures and notices:

    • Mandatory clear disclosures at opening of relationship and prior to initial transactions, detailing risks of virtual currency, volatility, irreversibility, regulatory changes, lack of FDIC/SIPC protections, and cyber risks.
    • Specific warnings about unauthorized transactions and customer warnings about scams, including a standardized customer notice.
    • Post-transaction receipts must include operator contact, transaction details, fees, exchange rates, operator liability, and refund policy.

  • Consumer protection and fraud prevention:

    • Operators must use blockchain analytics to screen for transfers to fraudulent wallets; department may request evidence.
    • Live, toll-free customer service required during business hours; number displayed at the kiosk.
    • Written anti-fraud policy with risk assessment, controls, monitoring responsibilities, and periodic evaluation.

  • Enhanced Due Diligence (EDD):

    • Mandatory written EDD policy, board-approved, addressing at-risk customers (e.g., regarding age or mental capacity).

  • Compliance structure:

    • Operators must appoint a full-time compliance officer and a consumer protection officer, each not owning more than 20% of the operator.
    • Policies and procedures must be board-approved and aligned with federal/state law.

  • Location and reporting:

    • Operators must report kiosk locations quarterly within 45 days of quarter-end, including operator details and operation dates.
    • Kiosks must be located in secure areas with functioning security cameras and lighting (e.g., inside banks).

  • Licensing and operation:

    • All operators in the state are deemed money transmitters and must obtain a money transmitter license under existing New Jersey law.
    • Unlicensed operators must apply within 60 days of enactment and may operate during the application process; denied operators must cease operations.

  • Regulatory framework:

    • The Department of Banking and Insurance to adopt implementing rules; act takes effect on the first day of the 13th month after enactment.

Who is affected

  • Virtual currency kiosk operators (corporations, LLCs, partnerships, and qualified foreign entities) operating in New Jersey.
  • Consumers using virtual currency kiosks.
  • The Department of Banking and Insurance and related state regulators.

Timeline and procedural notes

  • Licensing: Unlicensed operators must apply within 60 days after enactment; temporary operation allowed during review; operations must cease if license is denied.
  • Reports: Quarterly location reporting within 45 days after each quarter.
  • Effective date: Enactment triggers a later effective date (first day of the 13th month after enactment) for the act’s broader provisions.

Summary

The Virtual Currency Kiosk Consumer Protection Act creates a structured regime to regulate virtual currency kiosks in New Jersey, emphasizing consumer education, risk disclosure, fraud prevention, robust compliance staffing, mandatory licensing as money transmitters, and periodic kiosk location reporting, with a focus on safeguarding consumers while permitting regulated, innovative use of digital currencies.

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

Sign in to ask a question.