LBD15416-04-6
A. 10899--B 2
CIAL PURPOSES AND DOES NOT INVOLVE THE TRANSFER OF MORE THAN A NOMINAL
AMOUNT OF VIRTUAL CURRENCY;
(B) STORING, HOLDING, OR MAINTAINING CUSTODY OR CONTROL OF VIRTUAL
CURRENCY ON BEHALF OF OTHERS;
(C) BUYING AND SELLING VIRTUAL CURRENCY AS A CUSTOMER BUSINESS;
(D) PERFORMING EXCHANGE SERVICES AS A CUSTOMER BUSINESS; OR
(E) CONTROLLING, ADMINISTERING, OR ISSUING A VIRTUAL CURRENCY.
THE DEVELOPMENT AND DISSEMINATION OF SOFTWARE IN AND OF ITSELF SHALL
NOT CONSTITUTE VIRTUAL CURRENCY BUSINESS ACTIVITY.
2. "CONSUMER" SHALL MEAN A NATURAL PERSON WHO USES A CRYPTO KIOSK
REGARDLESS OF WHETHER THEY CREATE AN ACCOUNT WITH THE OPERATOR.
3. "CRYPTO KIOSK" SHALL MEAN ANY ELECTRONIC TERMINAL OR RETAIL
LOCATION WHICH ENABLES A CONSUMER TO EXCHANGE MONEY FOR VIRTUAL CURRENCY
INCLUDING BY CONNECTING TO A SEPARATE VIRTUAL CURRENCY EXCHANGE.
4. "OPERATOR" MEANS A PERSON THAT ENGAGES IN VIRTUAL CURRENCY BUSINESS
ACTIVITY VIA A CRYPTO KIOSK OR CASHIER CRYPTO EXCHANGE LOCATED IN THIS
STATE, OR A PERSON THAT OWNS, OPERATES, OR MANAGES A CRYPTO KIOSK OR
CASHIER CRYPTO EXCHANGE LOCATED IN THIS STATE THROUGH WHICH VIRTUAL
CURRENCY BUSINESS ACTIVITY IS OFFERED. THIS DEFINITION APPLIES WHETHER
OR NOT THE OPERATOR OWNS THE KIOSKS OR CASHIER CRYPTO EXCHANGES USED IN
TRANSACTIONS, AND WHETHER THE OPERATOR PROVIDES CUSTODIAL OR NON-CUSTO-
DIAL SERVICES. A GROUP OR PERSONS OR ENTITIES ACTING IN CONCERT, INCLUD-
ING BUT NOT LIMITED TO ANY AFFILIATED ENTITIES, SUBSIDIARIES, PARENT
COMPANIES, JOINT VENTURES, PARTNERSHIPS, AGENTS, OR EMPLOYEES THEREOF,
OR ANY ENTITY OR INDIVIDUAL ACTING AT THE DIRECTION OF, IN COOPERATION
WITH, UNDER CONTRACT OR IN PARTNERSHIP WITH, OR FINANCIALLY BENEFITTING
FROM ANOTHER PERSON OR ENTITY SHALL BE TREATED AS ONE PERSON FOR
PURPOSES OF THIS ARTICLE.
5. "CASHIER CRYPTO EXCHANGE" SHALL MEAN A METHOD OF EXCHANGING VIRTUAL
CURRENCY IN EXCHANGE FOR FUNDS, WHERE SUCH FUNDS ARE COLLECTED AT A
RETAILER ACTING AS AN AGENT OR PROCESSOR FOR SUCH TRANSACTION.
6. "RETAILER" SHALL MEAN ANY PHYSICAL LOCATION THAT SELLS GOODS OR
SERVICES TO CONSUMERS FOR PERSONAL OR COMMERCIAL USE.
7. (A) "VIRTUAL CURRENCY" SHALL MEAN ANY TYPE OF DIGITAL UNIT THAT IS
USED AS A MEDIUM OF EXCHANGE OR A FORM OF DIGITALLY STORED VALUE. VIRTU-
AL CURRENCY SHALL BE BROADLY CONSTRUED TO INCLUDE DIGITAL UNITS OF
EXCHANGE THAT:
(I) HAVE A CENTRALIZED REPOSITORY OR ADMINISTRATOR;
(II) ARE DECENTRALIZED AND HAVE NO CENTRALIZED REPOSITORY OR ADMINIS-
TRATOR; OR
(III) MAY BE CREATED OR OBTAINED BY COMPUTING OR MANUFACTURING EFFORT.
(B) VIRTUAL CURRENCY SHALL NOT BE CONSTRUED TO INCLUDE ANY OF THE
FOLLOWING:
(I) DIGITAL UNITS THAT:
(1) ARE USED SOLELY WITHIN ONLINE GAMING PLATFORMS;
(2) HAVE NO MARKET OR APPLICATION OUTSIDE OF ONLINE GAMING PLATFORMS;
(3) CANNOT BE CONVERTED INTO, OR REDEEMED FOR, FIAT CURRENCY OR VIRTU-
AL CURRENCY; OR
(4) MAY OR MAY NOT BE REDEEMABLE FOR REAL-WORLD GOODS, SERVICES,
DISCOUNTS, OR PURCHASES;
(II) DIGITAL UNITS THAT CAN BE REDEEMED FOR GOODS, SERVICES,
DISCOUNTS, OR PURCHASES AS PART OF A CUSTOMER AFFINITY OR REWARDS
PROGRAM WITH THE ISSUER OR OTHER DESIGNATED MERCHANTS OR CAN BE REDEEMED
FOR DIGITAL UNITS IN ANOTHER CUSTOMER AFFINITY OR REWARDS PROGRAM, BUT
CANNOT BE CONVERTED INTO, OR REDEEMED FOR, FIAT CURRENCY OR VIRTUAL
CURRENCY; OR
A. 10899--B 3
(III) DIGITAL UNITS USED AS PART OF PREPAID CARDS.
8. "FUNDS" SHALL MEAN CASH OR OTHER MONETARY VALUE ACCEPTED BY THE
CRYPTO KIOSK OR CASHIER CRYPTO EXCHANGE.
9. "EXECUTION" SHALL MEAN THE IRREVERSIBLE BROADCAST BY THE OPERATOR
OF A TRANSFER OF VIRTUAL CURRENCY TO THE CONSUMER-DESIGNATED ADDRESS ON
A BLOCKCHAIN.
§ 76-B. CRYPTO KIOSK AND CASHIER CRYPTO EXCHANGE OPERATORS. 1. AN
OPERATOR OF A CRYPTO KIOSK OR CASHIER CRYPTO EXCHANGE THAT ENGAGES IN
VIRTUAL CURRENCY BUSINESS ACTIVITY SHALL OBTAIN A VIRTUAL CURRENCY
LICENSE FROM THE DEPARTMENT AND COMPLY WITH ALL APPLICABLE REQUIREMENTS
ESTABLISHED BY THE SUPERINTENDENT.
2. AN OPERATOR SHALL PROVIDE, IN A CLEAR AND CONSPICUOUS MANNER, ON
ITS WEBSITE OR WEBSITES, IN ALL PHYSICAL LOCATIONS, AND IN ANY OTHER
LOCATION AS THE SUPERINTENDENT MAY PRESCRIBE, THE FOLLOWING DISCLOSURES:
(A) THE OPERATOR'S MAILING ADDRESS, EMAIL ADDRESS, AND TELEPHONE
NUMBER FOR THE RECEIPT OF COMPLAINTS;
(B) A STATEMENT THAT THE COMPLAINANT MAY ALSO BRING THEIR COMPLAINT TO
THE ATTENTION OF THE DEPARTMENT;
(C) THE DEPARTMENT'S MAILING ADDRESS, WEBSITE, AND TELEPHONE NUMBER;
AND
(D) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
3. ANY PROVISION IN A CONTRACT OR WAIVER THAT CONFLICTS WITH OR WAIVES
ANY PROVISION OR REQUIREMENT IN THIS SECTION SHALL BE DEEMED VOID AND
UNENFORCEABLE.
§ 76-C. DISCLOSURES FOR CRYPTO KIOSKS. 1. A CRYPTO KIOSK OPERATOR
SHALL DISCLOSE IN A CLEAR, CONSPICUOUS, AND EASILY READABLE MANNER IN
THE CHOSEN LANGUAGE OF THE USER, ALL RELEVANT TERMS AND CONDITIONS
GENERALLY ASSOCIATED WITH THE PRODUCTS, SERVICES, AND ACTIVITIES OF THE
CRYPTO KIOSK OPERATOR AND VIRTUAL CURRENCY INCLUDING BUT NOT LIMITED TO
TRANSACTION FEES COLLECTED AND EXCHANGE RATES USED BY THE OPERATOR.
2. EACH TIME A USER ENGAGES WITH A CRYPTO KIOSK, THE CRYPTO KIOSK
OPERATOR SHALL RECEIVE ACKNOWLEDGEMENT OF RECEIPT OF ALL DISCLOSURES
REQUIRED UNDER THIS SECTION VIA CONFIRMATION OF CONSENT AT THE CRYPTO
KIOSK.
§ 76-D. DISCLOSURES REQUIRED PRIOR TO COMPLETING A TRANSACTION. 1. IN
ADDITION TO ANY OTHER DISCLOSURES REQUIRED PURSUANT TO THIS ARTICLE,
DISCLOSURES REQUIRED PURSUANT TO THIS SECTION SHALL AT A MINIMUM INCLUDE
THE FOLLOWING MESSAGE, IN A SUBSTANTIALLY SIMILAR FORM AND SHALL BE
DISPLAYED PRIOR TO THE CONSUMER COMPLETING THE TRANSACTION ON A CRYPTO
KIOSK OR CASHIER CRYPTO EXCHANGE, IN A FORM, SIZE, PLACEMENT, AND MANNER
AS PRESCRIBED BY THE DEPARTMENT BY REGULATION:
"WARNING:
IF SOMEONE ASKED YOU TO DEPOSIT MONEY IN THIS MACHINE AND/OR IS ON THE
PHONE WITH YOU AND CLAIMS TO BE A:
* FRIEND OR FAMILY MEMBER,
* GOVERNMENT AGENT,
* COMPUTER SOFTWARE REPRESENTATIVE,
* BILL COLLECTOR,
* LAW ENFORCEMENT OFFICER,
* OR ANYONE YOU DO NOT KNOW PERSONALLY,
STOP THIS TRANSACTION IMMEDIATELY AND CONTACT YOUR LOCAL LAW ENFORCE-
MENT AND THE KIOSK OPERATOR. THIS MAY BE A SCAM."
2. THE MESSAGE REQUIRED BY THIS SECTION SHALL NOT BE ALTERED, DIMIN-
ISHED, OR OTHERWISE OBSCURED IN ANY MANNER. NO ADDITIONAL MESSAGE SHALL
APPEAR ON OR NEAR THE SAME NOTICE, SCREEN, OR ON ANY SCREEN WHICH
DISTRACTS FROM OR IS PRESENTED AS RELATED TO THE REQUIRED MESSAGE.
A. 10899--B 4
3. WHEN USING A CRYPTO KIOSK, THE FOLLOWING INFORMATION SHALL BE
PROVIDED TO THE CONSUMER:
(A) THE NAME, ADDRESS, AND TELEPHONE NUMBER OF THE OWNER OF THE KIOSK
AND THE DAYS, TIME, MEANS BY WHICH A USER CAN CONTACT THE OWNER FOR
ASSISTANCE, AND ANY RELEVANT STATE AND LOCAL LAW ENFORCEMENT AND/OR
GOVERNMENT AGENCY FOR REPORTING FRAUD SHALL BE DISPLAYED ON OR AT THE
LOCATION OF THE CRYPTO KIOSK OR CASHIER CRYPTO EXCHANGE, OR ON THE FIRST
SCREEN OF A CRYPTO KIOSK.
(B) ANY OTHER DISCLOSURE THAT THE DEPARTMENT MAY REQUIRE.
§ 76-E. TRANSACTION RECEIPT. UPON THE COMPLETION OF EACH TRANSACTION
THE CRYPTO KIOSK OR CASHIER CRYPTO EXCHANGE OPERATOR SHALL PROVIDE THE
USER WITH PAPER AND ELECTRONIC RECEIPTS IN A RETAINABLE FORM. THE
RECEIPT SHALL INCLUDE THE FOLLOWING INFORMATION:
1. THE OPERATOR'S NAME AND TOLL-FREE CUSTOMER SERVICE PHONE NUMBER;
2. RELEVANT CONTACT INFORMATION FOR STATE AND/OR LOCAL LAW ENFORCEMENT
AND/OR GOVERNMENT AGENCY TO REPORT FRAUD;
3. TYPE, VALUE, DATE, AND PRECISE TIME OF THE TRANSACTION, AND EACH
APPLICABLE VIRTUAL CURRENCY ADDRESS AND TRANSACTION HASH WHERE AVAIL-
ABLE;
4. ALL FEES;
5. EXCHANGE RATE OF THE VIRTUAL CURRENCY TO UNITED STATES DOLLARS;
6. STATEMENT OF THE OPERATOR'S REFUND POLICY;
7. ANY ADDITIONAL INFORMATION THE OPERATOR MAY DETERMINE; AND
8. ANY ADDITIONAL INFORMATION THE DEPARTMENT MAY REQUIRE.
§ 76-F. CUSTOMER SERVICE. ALL CRYPTO KIOSK AND CASHIER CRYPTO EXCHANGE
OPERATORS PERFORMING BUSINESS SHALL PROVIDE LIVE CUSTOMER SERVICE DURING
OPERATING HOURS INCLUDING THE HOURS BETWEEN 8 AM TO 10 PM LOCAL TIME.
THE CUSTOMER SERVICE TOLL-FREE NUMBER SHALL BE DISPLAYED ON THE CRYPTO
KIOSK OR THE CRYPTO KIOSK SCREENS AND SHALL BE RUN BY TRAINED INDIVID-
UALS WHO ARE EMPLOYED BY OR ON BEHALF OF THE OPERATOR, AND WHO PROVIDE
LIVE CUSTOMER ASSISTANCE TO A CALLER IN REAL TIME. IN THE CASE OF A
CASHIER CRYPTO EXCHANGE, SUCH TOLL-FREE NUMBER SHALL BE DISPLAYED IN A
CONSPICUOUS MANNER THAT IS READILY AVAILABLE TO THE CONSUMER.
§ 76-G. CRYPTO KIOSK TRANSACTION HOLD PERIODS. 1. NO PERSON SHALL
OPERATE A CRYPTO KIOSK IN THIS STATE UNLESS SUCH OPERATOR COMPLIES WITH
THE FOLLOWING:
(A) UPON RECEIPT OF FUNDS FROM A CONSUMER IN AN AMOUNT OF ONE THOUSAND
DOLLARS OR MORE IN ANY TWENTY-FOUR HOUR PERIOD, THE OPERATOR SHALL NOT
EXECUTE ANY VIRTUAL CURRENCY TRANSMISSION FOR A HOLD PERIOD OF SEVENTY-
TWO HOURS FROM THE TIME OF RECEIPT.
(B) ALL SUCH FUNDS ACCEPTED DURING THE HOLD PERIOD SHALL BE HELD IN
STATUTORY TRUST FOR THE EXCLUSIVE BENEFIT OF THE CONSUMER IN SEGREGATED,
NON-COMMINGLED ACCOUNTS, SHALL NOT BE ENCUMBERED OR PLEDGED, AND LEGAL
AND BENEFICIAL OWNERSHIP SHALL REMAIN WITH THE CONSUMER UNTIL EXECUTION
IN ACCORDANCE WITH THIS SECTION.
(C) THE OPERATOR SHALL AGGREGATE A CONSUMER'S TRANSACTIONS ACROSS ALL
KIOSKS WITHIN ANY TWENTY-FOUR HOUR PERIOD FOR PURPOSES OF THE THRESHOLD
IN PARAGRAPH (A) OF THIS SUBDIVISION. MULTIPLE TRANSACTIONS THAT EXCEED
ONE THOUSAND DOLLARS OVER A TWENTY-FOUR HOUR PERIOD SHALL BE TREATED AS
ONE TRANSACTION;
(D) BOTH ON THE MACHINE AND ON THE CUSTOMER'S RECEIPT, THE OPERATOR
PROVIDES:
(I) A CURRENT, TOLL-FREE CONTACT NUMBER DEDICATED TO CANCELLATION AND
REFUND REQUESTS;
(II) THE TRANSACTION IDENTIFIER;
(III) THE HOLD-PERIOD EXPIRATION TIMESTAMP; AND
A. 10899--B 5
(IV) A CLEAR AND CONSPICUOUS NOTICE THAT ANY AMOUNTS AGGREGATED TO ONE
THOUSAND DOLLARS AND OVER IN A TWENTY-FOUR HOUR PERIOD CAN BE REFUNDED
UPON REQUEST.
(E) ANY OTHER RULE OR REGULATION ESTABLISHED BY THE SUPERINTENDENT,
WHICH MAY INCLUDE KNOW YOUR CUSTOMER, ANTI-MONEY LAUNDERING, AND OTHER
REGULATIONS.
2. THE CONSUMER MAY CANCEL THEIR TRANSACTION AT ANY TIME DURING THE
HOLD PERIOD USING THE INFORMATION IN PARAGRAPH (D) OF SUBDIVISION ONE OF
THIS SECTION AND THE OPERATOR SHALL NOT REFUSE, FRUSTRATE, OR CHARGE ANY
FEE FOR COLLECTION.
3. UPON THE CONSUMER'S TIMELY CANCELLATION DURING THE HOLD PERIOD, THE
OPERATOR SHALL REFUND THE FULL AMOUNT TENDERED BY THE CONSUMER, INCLUD-
ING ALL FEES, WITHIN SEVEN BUSINESS DAYS OF NOTICE BY THE CONSUMER OR
THE CONSUMER'S REPRESENTATIVE. REFUNDS SHALL BE MADE BY CHECK SENT VIA
CERTIFIED MAIL TO THE CONSUMER'S ADDRESS ON FILE. SUCH AMOUNTS REFUNDED
SHALL BE THE AMOUNT DEPOSITED INCLUDING ANY AND ALL FEES. OPERATORS MAY
NOT CHARGE FEES TO ISSUE A REFUND.
4. WHERE AN OPERATOR VIOLATES PARAGRAPH (B) OR (C) OF SUBDIVISION ONE
OF THIS SECTION OR SUBDIVISION THREE OF THIS SECTION, OR REFUSES OR
FRUSTRATES RESTITUTION IN ACCORDANCE WITH THE PROVISIONS OF SUBDIVISION
SEVEN OF THIS SECTION, SUCH OPERATOR SHALL BE SUBJECT TO A CIVIL PENALTY
OF THE GREATER OF TWO THOUSAND FIVE HUNDRED DOLLARS OR THREE TIMES THE
AMOUNT TENDERED TO THE OPERATOR IN THE AMOUNT THAT SUCH CRYPTO WAS WORTH
AT THE TIME OF SUCH TENDER, INCLUSIVE OF ALL FEES PAID BY THE CONSUMER,
WHICHEVER IS GREATER.
5. IN ADDITION TO THE PENALTIES SET FORTH HEREIN, WHERE AN OPERATOR
FAILS TO COMPLY WITH ANY PROVISION OF THIS SECTION, LEGAL AND BENEFICIAL
OWNERSHIP OF THE FUNDS ACCEPTED SHALL BE CONCLUSIVELY PRESUMED TO REMAIN
WITH THE CONSUMER, AND THE OPERATOR SHALL RETURN THE FULL PRINCIPAL AND
ALL FEES WITHIN SEVEN BUSINESS DAYS OF NOTICE BY THE CONSUMER OR THE
CONSUMER'S REPRESENTATIVE.
6. WHERE AN OPERATOR ENGAGES IN A PERSISTENT COURSE OF CONDUCT IN
VIOLATION OF THIS SECTION, THE DEPARTMENT MAY REVOKE SUCH OPERATOR'S
LICENSE OR CHARTER AND SUCH OPERATOR SHALL BE SUBJECT TO A CIVIL PENALTY
OF FIVE HUNDRED DOLLARS PER TRANSACTION IN VIOLATION OF SUCH SUBDIVI-
SIONS.
§ 76-H. FRAUD REFUNDS RELATED TO CRYPTO KIOSKS. 1. IN CASES RELATED TO
FRAUD, WHERE A CRYPTO KIOSK OPERATOR FAILS TO COMPLY WITH THE PROVISIONS
OF SECTIONS SEVENTY-SIX-G AND SEVENTY-SIX-K OF THIS ARTICLE, SUCH OPERA-
TOR SHALL ISSUE A REFUND TO A CONSUMER IN THE FULL AMOUNT OF ALL TRANS-
ACTIONS PAID BY THE CONSUMER, INCLUDING, BUT NOT LIMITED TO, ANY FEES OR
OTHER CHARGES COLLECTED IN CONNECTION WITH THE TRANSACTIONS, AT THE TIME
OF THE TRANSACTION, REGARDLESS OF ANY ACKNOWLEDGMENTS OR WAIVERS THE
CONSUMER MAY HAVE MADE PRIOR TO FINALIZING THE TRANSACTIONS. REFUNDS
SHALL BE MADE IN THE ORIGINATING CURRENCY. OPERATORS SHALL NOT CHARGE
ANY FEES TO ISSUE A REFUND.
2. TO RECEIVE A REFUND UNDER THIS SECTION, A CONSUMER MUST:
(A) HAVE ENGAGED IN ONE OR MORE CRYPTO KIOSK TRANSACTIONS THAT WERE
AFFECTED BY FRAUD, WHETHER THE TRANSACTIONS WERE AUTHORIZED OR UNAUTHOR-
IZED;
(B) NOTIFY THE CRYPTO KIOSK OPERATOR OF THE FRAUDULENT NATURE OF THE
TRANSACTION OR TRANSACTIONS WITHIN NINETY DAYS AFTER THE LAST SUCH TRAN-
SACTION OCCURRED OR THE CONSUMER BECOMING AWARE OF THE FRAUD; AND
(C) WITHIN ONE HUNDRED TWENTY DAYS AFTER NOTIFYING THE OPERATOR,
SUBMIT TO THE OPERATOR A POLICE REPORT, GOVERNMENT AGENCY REPORT, OR
A. 10899--B 6
SWORN STATEMENT DESCRIBING THE FRAUDULENT NATURE OF THE TRANSACTION OR
TRANSACTIONS.
3. IF THE CONDITIONS FOR A REFUND ARE MET, THE OPERATOR SHALL ISSUE
THE REFUND WITHIN SEVENTY-TWO HOURS AFTER RECEIVING THE REQUIRED
DOCUMENTATION.
4. FOR ALL COMMUNICATIONS RELATING TO REFUNDS, THE OPERATOR SHALL
PROVIDE WRITTEN NOTICES IN ENGLISH AND SPANISH, AND SHALL COMMUNICATE
WITH THE CONSUMER IN THE CONSUMER'S PREFERRED LANGUAGE THROUGH STAFF,
INTERPRETATION SERVICES, AND/OR AUXILIARY AIDS AND SERVICES.
5. ANY PROVISION IN A CONTRACT OR WAIVER RELATING TO ANY PROVISION IN
THIS SECTION SHALL BE DEEMED VOID AND UNENFORCEABLE.
§ 76-I. CASHIER CRYPTO TRANSMISSION PROHIBITION. 1. NO PERSON OR ENTI-
TY INVOLVED IN A CASHIER CRYPTO EXCHANGE TRANSACTION SHALL PERMIT,
FACILITATE, OR ENABLE THE TRANSMISSION OF VIRTUAL CURRENCY.
2. A CASHIER CRYPTO EXCHANGE SHALL BE USED FOR THE SOLE PURPOSE OF
EXCHANGING VIRTUAL CURRENCY FOR UNITED STATES DOLLARS, WHETHER IN CASH
OR DEPOSITED TO A BANK ACCOUNT.
3. NO CASHIER CRYPTO EXCHANGE SHALL EVADE THE PROHIBITIONS UNDER THIS
SECTION BY ANY DEVICE, SUBTERFUGE, OR PRETENSE.
§ 76-J. CRYPTO KIOSK OR CASHIER CRYPTO FEES. 1. THE AGGREGATE OF ALL
FEES, CHARGES, COMMISSIONS, AND OTHER AMOUNTS, DIRECTLY OR INDIRECTLY,
CHARGED TO A CUSTOMER IN CONNECTION WITH A SINGLE TRANSACTION OR SERIES
OF RELATED TRANSACTIONS INVOLVING VIRTUAL CURRENCY EFFECTED THROUGH A
CRYPTO KIOSK OR CASHIER CRYPTO EXCHANGE, INCLUDING ANY DIFFERENCE
BETWEEN THE PRICE CHARGED TO THE CUSTOMER TO BUY, SELL, EXCHANGE, SWAP,
OR CONVERT VIRTUAL CURRENCY AND THE PREVAILING MARKET VALUE AT THE TIME
OF THE TRANSACTION, SHALL NOT EXCEED THREE PERCENT OF THE UNITED STATES
DOLLAR VALUE OF THE TRANSACTION.
2. WHERE AN OPERATOR VIOLATES THE PROVISIONS OF THIS SECTION, SUCH
OPERATOR SHALL BE SUBJECT TO A CIVIL PENALTY OF FIVE HUNDRED DOLLARS PER
TRANSACTION WHICH VIOLATES THIS SECTION.
3. A CONSUMER MAY BRING A CIVIL ACTION TO RECOVER ANY AMOUNTS UNLAW-
FULLY CHARGED IN VIOLATION OF THIS SECTION, TOGETHER WITH INTEREST AND
STATUTORY DAMAGES EQUAL TO THE GREATER OF ONE THOUSAND DOLLARS OR THREE
TIMES THE AMOUNT CHARGED TO THE CONSUMER.
4. ANY PROVISION IN A CONTRACT OR WAIVER RELATING TO ANY PROVISION IN
THIS SECTION SHALL BE DEEMED VOID AND UNENFORCEABLE.
§ 76-K. FRAUD AND ANTI-MONEY LAUNDERING. 1. ALL CRYPTO KIOSK OPERATORS
SHALL TAKE REASONABLE STEPS TO DETECT AND PREVENT FRAUD AND MONEY LAUN-
DERING, INCLUDING ESTABLISHING AND MAINTAINING A WRITTEN ANTI-FRAUD AND
MONEY LAUNDERING POLICY AND ABIDING BY BANK SECRECY ACT, 31 U.S.C. 5311
ET SEQ., PROVISIONS.
2. THE ANTI-FRAUD AND MONEY LAUNDERING POLICY SHALL BE FILED WITH THE
DEPARTMENT AS PART OF AN APPLICATION FOR A LICENSE OR CHARTER AND SHALL,
AT A MINIMUM, INCLUDE:
(A) IMPLEMENTATION OF KNOW YOUR CUSTOMER POLICIES;
(B) VERIFICATION OF THE CUSTOMER PRIOR TO ENGAGING IN THE TRANSACTION;
(C) IDENTIFICATION AND ASSESSMENT OF FRAUD AND MONEY LAUNDERING
RELATED RISK AREAS;
(D) PROCEDURES AND CONTROLS TO PROTECT AGAINST IDENTIFIED RISKS;
(E) ALLOCATION OF RESPONSIBILITY FOR MONITORING RISKS; AND
(F) PROCEDURES FOR THE PERIODIC EVALUATION AND REVISION OF THE ANTI-
FRAUD AND MONEY LAUNDERING PROCEDURES, CONTROLS, AND MONITORING MECH-
ANISMS.
§ 76-L. BLOCKCHAIN ANALYTICS. 1. ALL CRYPTO KIOSK OPERATORS SHALL USE
BLOCKCHAIN ANALYTICS AND TRACING SOFTWARE TO ASSIST IN THE PREVENTION OF
A. 10899--B 7
SENDING VIRTUAL CURRENCY TO A VIRTUAL CURRENCY WALLET KNOWN OR LIKELY TO
BE AFFILIATED WITH FRAUDULENT ACTIVITY AT THE TIME OF A TRANSACTION AND
TO DETECT TRANSACTION PATTERNS INDICATIVE OF FRAUD OR OTHER ILLICIT
ACTIVITIES.
2. CRYPTO KIOSK OPERATORS SHALL BLOCK TRANSACTIONS TO VIRTUAL CURRENCY
WALLETS ASSOCIATED WITH OVERSEAS EXCHANGES NON-ACCESSIBLE FOR UNITED
STATES USERS.
3. ALL CRYPTO KIOSK OPERATORS PERFORMING BUSINESS SHALL PROVIDE A
DEDICATED COMMUNICATIONS LINE FOR RELEVANT GOVERNMENT AGENCIES VIA A
POSTED UNITED STATES PHONE NUMBER OR EMAIL ADDRESS. THIS DEDICATED LINE
SHALL BE USED TO FACILITATE LAW ENFORCEMENT AND REGULATORY AGENCY COMMU-
NICATIONS WITH THE CRYPTO KIOSK AND CASHIER CRYPTO EXCHANGE OPERATOR IN
THE EVENT OF A FRAUD REPORT FROM A USER. THE COMMUNICATIONS LINE SHALL
BE FREQUENTLY MONITORED.
§ 76-M. TRANSACTION LIMITS AND PROTECTIONS. 1. DAILY TRANSACTION
LIMIT. A CRYPTO KIOSK OR CASHIER CRYPTO EXCHANGE OPERATOR SHALL NOT
ACCEPT TRANSACTIONS OF MORE THAN ONE THOUSAND DOLLARS IN UNITED STATES
DOLLARS OR THE EQUIVALENT IN VIRTUAL CURRENCY FOR ANY USER PER DAY
ACROSS ALL CRYPTO KIOSKS OR CASHIER CRYPTO EXCHANGE OF SUCH OPERATOR. IN
ADDITION, THE TRANSACTION LIMIT SHALL NOT EXCEED TEN THOUSAND DOLLARS IN
UNITED STATES OR THE EQUIVALENT IN VIRTUAL CURRENCY IN ANY THIRTY-DAY
PERIOD.
2. THE TRANSACTION LIMITS AND PROTECTIONS PROVIDED FOR IN THIS ACT
SHALL APPLY TO ALL PRODUCTS OR SERVICES OFFERED BY AN OPERATOR THROUGH A
CRYPTO KIOSK.
3. OPERATORS SHALL NOT USE ALTERNATIVE METHODS, INCLUDING BUT NOT
LIMITED TO ONLINE PORTALS, AFFILIATED KIOSKS, OR OVER-THE-COUNTER TRANS-
ACTIONS, TO EVADE OR EXCEED THE LIMITS PROVIDED FOR IN THIS SECTION.
4. DATA COLLECTED BY THE DEPARTMENT PURSUANT TO THIS SECTION SHALL BE
CONFIDENTIAL AND MAY BE RELEASED ONLY IN COMPOSITE FORM, EXCEPT AS
OTHERWISE PROVIDED BY LAW.
§ 76-N. LEGAL AND BENEFICIAL OWNERSHIP; PENALTIES. 1. WHERE AN OPERA-
TOR OF A CRYPTO KIOSK FAILS TO COMPLY WITH SUBDIVISION ONE OF SECTION
SEVENTY-SIX-B, SECTION SEVENTY-SIX-G, SECTION SEVENTY-SIX-K OR SECTION
SEVENTY-SIX-L OF THIS ARTICLE, LEGAL AND BENEFICIAL OWNERSHIP OF THE
FUNDS ACCEPTED SHALL BE CONCLUSIVELY PRESUMED TO REMAIN WITH THE CONSUM-
ER, AND THE OPERATOR SHALL RETURN THE FULL PRINCIPAL AND ALL FEES WITHIN
SEVEN BUSINESS DAYS OF NOTICE BY THE CONSUMER OR THE CONSUMER'S REPRE-
SENTATIVE.
2. WHERE AN OPERATOR OF A CASHIER CRYPTO EXCHANGE FAILS TO COMPLY WITH
SUBDIVISION ONE OF SECTION SEVENTY-SIX-B OR SECTION SEVENTY-SIX-I OF
THIS ARTICLE LEGAL AND BENEFICIAL OWNERSHIP OF THE FUNDS ACCEPTED SHALL
BE CONCLUSIVELY PRESUMED TO REMAIN WITH THE CONSUMER, AND THE OPERATOR
SHALL RETURN THE FULL PRINCIPAL AND ALL FEES WITHIN SEVEN BUSINESS DAYS
OF NOTICE BY THE CONSUMER OR THE CONSUMER'S REPRESENTATIVE. WHERE THE
OPERATOR FAILS TO PAY BACK SUCH PRINCIPAL AND FEES IN FULL WITHIN SUCH
PERIOD OF TIME AS DESCRIBED IN SUBDIVISION THREE OF SECTION
SEVENTY-SIX-G OF THIS ARTICLE, THE CONSUMER SHALL HAVE A PRIVATE RIGHT
OF ACTION TO RECOVER SUCH FUNDS AND, UPON SUCH A FINDING THAT THE OPERA-
TOR VIOLATED SUBDIVISION FIVE OF THIS SECTION, SUCH COURT SHALL AWARD
ATTORNEY'S FEES AND COSTS TO THE CONSUMER, INCLUDING STATUTORY DAMAGES
OF THREE TIMES THE AMOUNT REQUIRED TO BE PAID BACK TO THE CONSUMER.
3. WHERE AN OPERATOR OF A CRYPTO KIOSK OR CASHIER CRYPTO EXCHANGE
FAILS TO COMPLY WITH ANY PROVISION OF THIS ARTICLE WITH A SPECIFIC
PENALTY, SUCH PENALTY SHALL BE IMPOSED ON SUCH OPERATOR. WHERE NO PENAL-
TY IS PROVIDED, SUCH PENALTY SHALL BE THE GREATER OF ONE THOUSAND
A. 10899--B 8
DOLLARS PER VIOLATION OR TWO TIMES SUCH PROFITS EARNED FROM SUCH
VIOLATION.
4. THE ATTORNEY GENERAL MAY BRING AN ACTION IN THE NAME OF THE PEOPLE
OF THE STATE OF NEW YORK TO RESTRAIN OR PREVENT ANY VIOLATION OF THIS
ARTICLE OR ANY CONTINUANCE OF ANY SUCH VIOLATION AND TO OBTAIN RESTITU-
TION OF ANY MONEYS OR PROPERTY OBTAINED DIRECTLY OR INDIRECTLY BY ANY
SUCH VIOLATION, AS WELL AS REASONABLE ATTORNEYS' FEES.
§ 2. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be adjudged by any court of
competent jurisdiction to be invalid, such judgment shall not affect,
impair, or invalidate the remainder thereof, but shall be confined in
its operation to the clause, sentence, paragraph, subdivision, section
or part thereof directly involved in the controversy in which such judg-
ment shall have been rendered. It is hereby declared to be the intent of
the legislature that this act would have been enacted even if such
invalid provisions had not been included herein.
§ 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law.