Bitcoin of America, an Over the Counter (OTC) cryptocurrency exchange and a national operator of Bitcoin Kiosks, has been ordered to refund $86,000 to consumers in Connecticut, according to a recent announcement by the state’s Banking Commissioner, Jorge Perez.
The firm, known for its presence around the country with Bitcoin ATMs or BTMs, had been operating these kiosks without obtaining the necessary money transmitter license in Connecticut. These kiosks allowed consumers to purchase virtual currency using cash. However, four consumers in the state suffered substantial losses due to scams perpetrated through these unlicensed kiosks. This led to a settlement, and the firm is now winding down its operations in the state following a criminal indictment.
Commissioner Perez stated, “This case underlines the importance of vigilance when using virtual currency kiosks.” He emphasized the department’s commitment to ensuring that kiosk owners and operators comply with state licensing laws and regulations.
The victims were tricked into depositing cash into the kiosks using a QR code provided by the scammers, believing they were safeguarding their money. In reality, they were unknowingly purchasing virtual currency, which was then transferred to the scammers’ digital wallets, resulting in a loss of their funds.
In an effort to address this growing issue, the Department of Banking and the Connecticut State Police have introduced a bill, HB 6752 An Act Concerning Digital Assets. The bill seeks to mandate virtual currency kiosks be licensed as money transmitters, giving the Commissioner jurisdiction over these machines and their operators. It also aims to provide additional protections, including clear on-screen consumer disclosures and extra safeguards for first-time kiosk users.
Expressing his gratitude towards the Connecticut State Police for their assistance in the case, Commissioner Perez also shared that the Department of Banking, along with the Connecticut State Police, the Office of the Attorney General, and the Department of Consumer Protection, has issued an alert with tips to help consumers avoid falling prey to such scams in the future.