State Rep. Bruce J. Ayers (D-Quincy) filed House Bill No. 1089 on Jan. 16, 2025, proposing a new Chapter 169C of the General Laws to regulate virtual-currency kiosk operators in Massachusetts. The bill was submitted to the House committee on Financial Services.

The measure would define “virtual currency kiosk” and “virtual currency kiosk operator,” require operators to register as money transmitters, mandate customer disclosures and receipts, and impose reporting and compliance duties intended to limit fraud and protect consumers.

Under the bill, operators would have to provide clear written disclosures before an initial transaction that explain material risks of virtual currency, including that virtual currency is not legal tender, is not FDIC or SIPC insured, may be irreversible, and can be volatile. Operators must also provide written terms and conditions covering unauthorized-transaction liability, account statements, receipts or trade tickets, advance notice of rule changes and refund policies.

Operators would be required to display a customer warning at the kiosk before transactions and to give a digital or physical receipt that lists the operator’s contact information, transaction type, value, local date and time, fee charged, exchange rate if applicable, liability for delayed or non-delivery and the operator’s refund policy.

The bill mandates the use of blockchain-analytics software “to assist in the prevention of sending purchased virtual currency . . . to a digital wallet known to be affiliated with fraudulent activity at the time of a transaction,” and permits the Division of Banks to request proof of such use. It also requires operators to maintain written anti-fraud policies and an Enhanced Due Diligence Policy reviewed and approved by the operator’s board or equivalent; the enhanced policy must identify at minimum individuals at risk of fraud based on age or mental capacity.

Each operator must employ a full-time compliance officer and a full-time consumer-protection officer, and neither may be an individual owning more than 20% of the operator. Compliance responsibilities required under federal and state law must be performed by full-time employees, the bill says.

The bill would require operators doing business in Massachusetts to submit a quarterly location report within 45 days after the end of each calendar quarter with at least the company legal name, any trade name, physical address and the kiosk start and end dates at that location. It also says any operator that owns, operates, solicits, markets, advertises or facilitates kiosks in the state “shall be deemed to be engaged in money transmission” and must be licensed. Unlicensed operators would have 60 days after the act takes effect to apply for a money-transmitter license; applicants who apply within that window may continue operating while the Commonwealth reviews the application, and must cease operations if the application is denied.

The bill notes that if any provision conflicts with federal law — including the Bank Secrecy Act (31 U.S.C. 5311 et seq.) or the USA PATRIOT Act — the applicable federal law governs to the extent of any inconsistency. The measure’s definitions also reference the Nationwide Multistate Licensing System and Registry (NMLS) for licensing and registration functions.

As filed, the bill specifies minimum live customer-service availability “on Monday through Friday between 8AM EST and 10PM CST” and requires a toll-free number to be displayed on kiosks or kiosk screens; the measure does not further reconcile that cross-time-zone phrasing.

The bill (House, No. 1089) was presented by Representative Bruce J. Ayers and referred to the House committee on Financial Services for consideration.