Virginia's legislature has passed a bill regulating crypto kiosks to combat scams, introducing licensing requirements and consumer protections. The measure now awaits Governor Glenn Youngkin's signature. If signed, it would implement safeguards like transaction limits and fraud holds to protect users, particularly those mistaking kiosks for traditional ATMs.
Virginia's General Assembly has approved a comprehensive bill aimed at regulating cryptocurrency kiosks, often referred to as crypto ATMs, to address rising scam concerns. The legislation, sponsored by Delegate Michelle Maldonado, passed both chambers and is now pending approval from Governor Glenn Youngkin.
The bill establishes statewide licensing for kiosk operators, requiring them to register with the state, pay fees, and adhere to strict consumer protections. Key provisions include daily and monthly transaction limits, ID verification for all transactions, and caps on consumer fees. For new users, a 48-hour hold on funds allows for refunds if fraud is suspected, aiming to prevent irreversible losses in the blockchain environment.
Operators are prohibited from marketing the machines as ATMs or using related terminology, and kiosks must display clear warnings about scam risks. A registration system will track operators, and refund mechanisms will be available for recoverable funds.
Maldonado highlighted the dangers, noting cases like a Southwest Virginia resident who lost $15,000 and incidents in Fairfax County. "The thing about crypto is that once it goes into the exchange, which is in the blockchain environment, there’s no way to trace it. There’s no way to get it back," she stated. She added that kiosks confuse users: "They look like ATMs. They’re shaped like ATMs. But instead of taking money out, you’re sort of putting money in to purchase crypto that goes into a broader exchange."
Scams represent about 7% of the crypto kiosk industry's business, prompting proactive measures. AARP Virginia supports the bill, emphasizing vulnerabilities among older adults targeted by schemes involving fake debts, legal threats, and romantic manipulation. Maldonado described the regulation as forward-looking: "That doesn’t mean that there’s no problem. It means that it’s in the beginning. And so this is the time to put the guardrails and the safeguards in place so that 7% doesn’t grow."
If enacted, Virginia would align with other states overseeing these proliferating machines.