A bill aimed at regulating cryptocurrency kiosks to combat fraud has progressed through the Wyoming Legislature. House Bill 75, sponsored by Rep. Ken Clouston, passed the House and advanced in the Senate with an amendment for immediate effect. The measure addresses scams that have led to significant financial losses in the state.
House Bill 75, sponsored by Rep. Ken Clouston, R-Gillette, seeks to regulate virtual currency kiosks, which scammers have frequently used in recent years. The bill passed the Wyoming House on February 21 by a 56-5 vote. On Wednesday, the Senate Minerals Business and Economic Development Committee recommended it for approval on a 5-0 vote, incorporating an amendment to allow immediate effect if signed into law. It then passed the Senate Committee of the Whole on Thursday.
Clouston introduced the bill after local law enforcement in April highlighted widespread fraud involving these machines, typically owned by out-of-state companies and placed in grocery stores and convenience stores. According to figures from Gillette Police Detective Alan Stuber, about $3 million was lost to such kiosks in Campbell County. Scammers often instruct victims, via phone calls claiming missed payments or the need to bail out relatives, to withdraw cash and deposit it into a kiosk, after which the funds are rarely recovered.
"This isn’t a bill that directly stops the fraudulent behavior itself, this is regulating the kiosk which is being used as a tool in fraudulent behavior," said Sen. Chris Rothfuss, D-Laramie, a co-sponsor.
The legislation requires operators to be chartered financial institutions in Wyoming or licensed money transmitters. Unlicensed operators must cease activities until obtaining a license, and all unregistered kiosks would be banned. Wyoming State Banking Commissioner Jeremiah Bishop noted that six companies operate these kiosks in the state, with only three registered. The bill authorizes the commissioner to establish rules, including the use of blockchain analytics to flag scam-related transactions.
"If there’s a known wallet address tied to a scam, they will red flag that," Bishop said, explaining that this would prevent transactions and allow funds to be returned.
Representatives from Wyoming banks and credit unions supported the bill, emphasizing the need to protect members from unregulated kiosks. Jessie Dafoe of Coinflip, a licensed operator, expressed support, while Sen. Tara Nethercott, R-Jackson, criticized the measure for not going far enough and called for criminal investigations into illegitimate operators. "The danger is very real," she said, advocating for immediate action.
Nethercott also highlighted the liability faced by stores hosting these kiosks, stating, "They’re exposing themselves to significant liability, they’re exposing their community members to significant harm, in exchange for some rental fee."
Even with passage, concerns remain about punishing bad actors, but proponents view it as a necessary step forward.