Bill
A 5384
Creates a regulatory framework for virtual currency kiosks: licensing, disclosures, ongoing reporting, and DBI oversight to protect consumers and curb scams.
Status & procedural history
- Introduced: March 6, 2025
- Key committee actions: Referred to Corporations, Authorities & Commissions; transferred to Assembly Regulated Professions Committee (4/10/25); reported out with committee amendments (4/10/25) and referred to Assembly Science, Innovation & Technology Committee.
- Primary sponsor: Assemblymember Rebecca Seawright (multiple cosponsors).
- Companion: S4288.
Purpose and intent
- Establishes a regulatory framework to protect consumers who use virtual currency kiosks (physical electronic terminals that facilitate exchange between fiat currency and virtual currency). The act standardizes disclosures, imposes operational and reporting requirements on kiosk operators, and gives the Department of Banking and Insurance (DBI) authority to supervise and enforce compliance.
Key definitions (selected)
- Virtual currency: broadly defined to include centralized and decentralized digital units used as a medium of exchange or digitally-stored value; excludes tokens used solely inside online games or closed rewards programs that cannot be redeemed for fiat currency.
- Virtual currency kiosk: an electronic terminal that facilitates exchange of fiat and virtual currency, whether by connecting to an exchange or drawing on an operator’s inventory.
- Other defined terms include digital wallet, digital wallet address, blockchain, blockchain analytics, Commissioner (DBI), NMLS, and federal statutes (Bank Secrecy Act, USA PATRIOT Act).
Major provisions
- Required disclosures to customers (before an initial transaction and as part of the customer relationship) in clear, conspicuous English, including:
- Virtual currency is not legal tender, is not government-backed, and balances are not insured by FDIC or covered by SIPC.
- Transactions may be irreversible; legislative/regulatory actions can affect value and transferability.
- Notices of customer liability for unauthorized transactions and warnings about potential scams; a visible notice that the kiosk “is not an automated teller machine dispensing United States dollars.”
- Licensing and operational requirements:
- Virtual currency kiosk operators must obtain a money transmitter license from DBI (and interact with NMLS as applicable).
- Operators must employ a compliance officer and a consumer protection officer responsible for ensuring required disclosures and lawful operation.
- Operators must file quarterly reports with the Department listing kiosk locations.
- Kiosks are limited to secure locations (e.g., banks) with functioning security cameras and lighting.
- Confidentiality & public information:
- Most reports and examination materials submitted to the Department are confidential.
- Publicly available information will include operator name, business address, telephone, unique identifier, registered agent address, and copies of final DBI orders related to violations.
- Federal supremacy: where inconsistent with federal law (e.g., Bank Secrecy Act, USA PATRIOT Act), federal law governs.
- Enforcement powers:
- Commissioner may request records and evidence to verify compliance; operators must provide requested records.
Who would be affected
- Virtual currency kiosk operators (corporations/LLCs/foreign entities operating kiosks in the state) — new licensing, staffing, location, disclosure, reporting and compliance obligations.
- Consumers who use kiosks — receive standardized risk disclosures and warnings; kiosks located in more secure environments.
- Department of Banking & Insurance — gains supervisory, reporting, and enforcement responsibilities.
- Hosts of kiosks (banks, retailers) — must meet security/location requirements if hosting kiosks.
Potential impacts
- Aims to increase consumer awareness of risks of virtual currency and reduce fraud/scams associated with physical kiosks.
- Imposes regulatory compliance costs on operators (licensing, personnel, reporting, secure-site requirements), which could reduce prevalence of kiosks in unsecured retail locations.
- Aligns state oversight with federal AML/Counter‑Terrorism financing obligations by clarifying DBI investigatory authority and information requirements.
Notes / open items
- Full text (truncated in provided document) likely contains additional disclosure language, procedural detail, and penalties for violations — those should be consulted for implementation specifics.
- No explicit effective date is provided in the available excerpts.
Compiled from official sources — confirm details with the bill’s official record.
Sign in to ask a question.
