ARIZONA HOUSE OF REPRESENTATIVES

Fifty-seventh Legislature

First Regular Session

House: COM DPA 9-0-0-1

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note

HB 2387: cryptocurrency kiosk; license; fraud prevention

Sponsor: Representative Marshall, LD 7

House Engrossed

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.   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)

2.   Specifies the cryptocurrency kiosk operator must receive a receipt acknowledging all required disclosures from a customer through consent or confirmation. (Sec. 1)

3.   Instructs the cryptocurrency kiosk operator to separately provide outlined disclosures and requires the customer to accept both disclosures before executing a cryptocurrency transaction. (Sec. 1)

4.   Requires a cryptocurrency kiosk operator, on the completion of each kiosk transaction, to provide the individual with a physical or digital receipt containing specified information. (Sec. 1)

5.   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)

6.   Allows a relevant government entity to request evidence from a cryptocurrency kiosk operator showing current use of blockchain analytics. (Sec. 1)

7.   Requires a cryptocurrency operator to take reasonable steps to detect and prevent fraud, including establishing and maintaining a written anti-fraud policy and conforming to federal know your consumer and anti-money laundering laws. (Sec. 1)

8.   Prohibits a cryptocurrency operator from accepting more than $2,000 U.S. dollars in cash or the equivalent in virtual currency in one day from a new customer in Arizona. (Sec. 1)

9.   Requires, for existing customers, a cryptocurrency kiosk operator to ensure that the cryptocurrency kiosk does not accept or dispense in a single day more than $5,000 for a single person using one or more kiosks. (Sec. 1)

10.  Requires a cryptocurrency kiosk operator performing business in this state to provide live customer service at a minimum of 24 hours a day, 7 days per week. (Sec. 1)

11.  Requires the cryptocurrency kiosk or the cryptocurrency kiosk screen to display the toll-free customer service number. (Sec. 1)

12.  Asserts the Attorney General enforces cryptocurrency kiosk requirements and violation are subject to consumer fraud laws. (Sec. 1)

13.  Classifies individuals subject to the kiosk provisions as a new customer upon the effect date and are converted to an existing customer 72 hours after becoming a new customer. (Sec. 1)

14.  Defines pertinent terms. (Sec. 1)

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18.                    HB 2387

19.  Initials PB           Page 0 House Engrossed

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