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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
House: COM DPA 9-0-0-1 |
HB 2387: cryptocurrency kiosk; license; fraud prevention
Sponsor: Representative Marshall, LD 7
Caucus & COW
Overview
Provides requirements for operating a cryptocurrency kiosk.
History
The Department of Insurance and Financial Institutions (DIFI) is responsible for regulating the insurance industry, financial institutions and enterprises and financial services and insurance professionals, including money transmitters and the transmission of money.
Money transmission means: 1) selling or issuing payment instruments to a person located in this state; 2) selling or issuing stored value to a person located in this state; and 3) receiving money for transmission from a person located in this state (A.R.S. § 6-1201).
Provisions
1. Stipulates, beginning January 1, 2026, a cryptocurrency kiosk operator must be licensed by DIFI to conduct a virtual business or advertise a virtual business. (Sec. 1)
2. Instructs a cryptocurrency kiosk operator to provide to any governmental entity, on request, a list of any cryptocurrency kiosks that is owned, operated or managed by the operator. (Sec. 1)
3. Prevents a cryptocurrency kiosk operator from locating or allowing a third party to locate a cryptocurrency kiosk unless the operator is licensed to perform money transmission pursuant to statute. (Sec. 1)
4. Requires a cryptocurrency kiosk operator to notify DIFI within 10 business days if there are any changes to outlined information relating to the business or the cryptocurrency kiosk. (Sec. 1)
5. Delineates the records a cryptocurrency kiosk operator must maintain as secured, encrypted data, for at least five years relating to the virtual currency business activity. (Sec. 1)
6. Instructs the Attorney General to enforce cryptocurrency kiosk operator provisions. (Sec. 1)
7. Adds that any act or practice that violates cryptocurrency kiosk operator provisions is a violation of money transmission statutes and the Consumer Fraud Act. (Sec. 1)
8. Requires the cryptocurrency kiosk operator to disclose, in a clear, conspicuous and readable manner, all relevant terms and conditions that are associated with the products, services and activities of the operator and virtual currency. (Sec. 1)
9. Specifies the cryptocurrency kiosk operator must receive a receipt acknowledging all required disclosures from a customer through consent or confirmation. (Sec. 1)
10. Instructs the cryptocurrency kiosk operator to provide outlined disclosures separately from the appearance of a specified written warning. (Sec. 1)
11. Requires the customer to accept the disclosures before executing a cryptocurrency transaction. (Sec. 1)
12. Permits a cryptocurrency kiosk transaction if specified information is disclosed to a consumer. (Sec. 1)
13. Requires a cryptocurrency kiosk operator, on the completion of each kiosk transaction, to provide an individual with a physical receipt containing specified information. (Sec. 1)
14. Instructs a cryptocurrency kiosk operator to use blockchain analytics and tracing software to help prevent fraud by sending purchased virtual currency from an operator to a virtual wallet known to be affiliated with fraud at the time of a transaction. (Sec. 1)
15. Allows a relevant government entity to request evidence from a cryptocurrency kiosk operator showing current use of blockchain analytics. (Sec. 1)
16. Requires a cryptocurrency operator to take reasonable steps to detect and prevent fraud, including establishing and maintaining a written anti-fraud policy, conforming to federal know your consumer and anti-money laundering laws. (Sec. 1)
17. Asserts the anti-fraud policy must include:
a) identification and assessment of fraud related to risk areas;
b) procedures and controls to protect against identified risks;
c) allocation of responsibility for monitoring risks; and
d) procedures for the periodic evaluation and revision of the anti-fraud procedures, controls and monitoring mechanisms. (Sec. 1)
18. Requires a cryptocurrency kiosk operator to designate and employ a compliance officer with the following requirements:
a) the ability to coordinate and monitor compliance with state and federal rules and regulations;
b) full-time employment by the cryptocurrency kiosk operator; and
c) must not own more than twenty percent of the cryptocurrency kiosk operator. (Sec. 1)
19. Prohibits a cryptocurrency operator from accepting more than $1,000 U.S. dollars in cash or the equivalent in virtual currency in one day from an Arizona customer. (Sec. 1)
20. Requires a cryptocurrency kiosk operator performing business in this state to provide live customer service for a minimum of 24 hours a day, 7 days per week. (Sec. 1)
21. Requires the cryptocurrency kiosk or the cryptocurrency kiosk screen to display the toll-free customer service number. (Sec. 1)
22. Defines pertinent terms. (Sec. 1)
Amendments
Committee on Commerce
1. Deletes multiple provisions relating to requirements for operating a cryptocurrency kiosk.
2. Maintains the following requirements for operating a cryptocurrency kiosk:
a) the cryptocurrency kiosk operator must disclose, in a clear, conspicuous and readable manner, all relevant terms and conditions that are associated with the products, services and activities of the operator and virtual currency;
b) the cryptocurrency kiosk operator must receive a receipt acknowledging all required disclosures from a customer through consent or confirmation;
c) the cryptocurrency kiosk operator must provide outlined disclosures separately from the appearance of a specified written warning;
d) the customer must accept the disclosures before executing a cryptocurrency transaction;
e) a cryptocurrency kiosk operator, on the completion of each kiosk transaction, must provide an individual, who made the transaction at the kiosk, with a physical or digital receipt containing specified information;
f) a cryptocurrency kiosk operator must take reasonable steps to detect and prevent fraud, including establishing and maintaining a written anti-fraud policy, conforming to federal know your consumer and anti-money laundering laws;
g) a cryptocurrency operator is prohibited from accepting more than $2,000 U.S. dollars in cash or the equivalent in virtual currency in one day from an Arizona customer; and
h) a cryptocurrency kiosk operator performing business in this state must provide live customer service for a minimum of 24 hours a day, 7 days per week and display the toll-fee customer service number on the kiosk screen.
3. Maintains the requirement for the Attorney General to enforce cryptocurrency kiosk operator provisions.
4. Makes conforming changes.
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8. HB 2387
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