Mass. senators file bill to regulate virtual-currency kiosks, require licensing and consumer protections

BOSTON — Senators Patrick M. O'Connor and Joanne M. Comerford filed a bill on Jan. 17, 2025, that would create a new Chapter 169C in the Massachusetts General Laws to regulate virtual-currency kiosk operators across the Commonwealth.

The measure, filed as Senate No. 804, would require operators that own, operate, solicit, market, advertise or facilitate kiosks in Massachusetts to be licensed as money transmitters, register location data with the Massachusetts Division of Banks each quarter, and comply with state and applicable federal anti-money-laundering laws.

If enacted, the bill would: require operator disclosures and receipts that explain that virtual currency is not legal tender and is not covered by federal deposit insurance; mandate written anti-fraud and Enhanced Due Diligence policies (including identification of individuals at higher fraud risk by age or mental capacity); require operators to employ full-time compliance and consumer-protection officers who do not own more than 20% of the company; require use of blockchain-analytics tools to help prevent transfers to wallets known to be associated with fraudulent activity; and require operators to provide a toll-free customer-service number displayed on kiosks and transaction receipts.

The bill directs the Commissioner of the Massachusetts Division of Banks to administer the new chapter, to collect required records and to make certain non-confidential records public (for example: operator name, business address, phone number and any final departmental orders). It also states that, to the extent of any inconsistency, applicable federal law (including the Bank Secrecy Act and the USA PATRIOT Act) governs.

Timing and reporting provisions in the bill include a requirement that operators submit a report of the location of each kiosk within 45 days after the end of a calendar quarter. The text also states that unlicensed operators must apply for a money-transmitter license within 60 days after the act would take effect; those who apply within that window could continue operating while the Commonwealth reviews their applications, while applicants denied a license would have to cease operations until licensed.

The bill includes required customer warnings and receipts. Receipts must show the operator’s contact information, transaction type and value, date and precise time in the local time zone, fees charged, the exchange rate (if applicable), a statement of operator liability for non-delivery or delayed delivery, and the operator’s refund policy. The bill also prescribes an on-screen and pre-transaction notice warning customers about irreversible transactions, the possibility of fraud, and confirming that customers control the wallet to which they are sending funds.

A technical note in the bill text prescribes minimum live customer-service availability “Monday through Friday between 8AM EST and 10PM CST.” The bill text mixes time-zone abbreviations in a way that is internally inconsistent; the measure does not clarify intended local hours for Massachusetts customer service.

The bill text also contains language that appears to reference an Illinois state agency in the definition of “Secretary.” That cross-reference does not align with Massachusetts agencies; the bill otherwise designates the Massachusetts Division of Banks and its Commissioner as the implementing state authority.

The filing is a legislative proposal; the transcript of the bill is the text of the draft legislation as presented by the petitioners and does not indicate committee action, floor debate, or final votes. The measure would need to pass both legislative chambers and be signed by the governor to become law.