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Committee opens path for stricter oversight of crypto kiosks; plans a dedicated licensing approach
Summary
After testimony from banks, law enforcement and consumer groups about large losses and frequent scams, the committee agreed to develop a separate licensing and rulemaking approach for virtual currency kiosks rather than rely on existing money‑transmitter exemptions.
Lawmakers and state regulators signaled they will pursue a tailored regulatory framework for so‑called virtual currency kiosks after a lengthy hearing that included law‑enforcement reports of fraud, testimony from banks and credit unions about member losses, and industry witnesses urging consistent licensing.
Talies Hansen summarized draft 26 LSO 143, which would require operators of a virtual currency kiosk to either be licensed under the Wyoming Money Transmitters Act or be a financial institution chartered under statutes that already exempt certain banks and credit unions. Banking Commissioner Jeremiah Bishop explained kiosks are treated as money service businesses by federal regulators (FinCEN) and are subject to Bank Secrecy Act obligations; he recommended licensing and rulemaking so the division of banking can examine and require anti‑money‑laundering and fraud‑prevention measures.
Public testimony described numerous scams tied to kiosks: AARP Wyoming reported older adults are common victims; law enforcement and credit‑union witnesses detailed multi‑thousand‑dollar losses and rapid growth in complaint volume. CoinFlip, a kiosk operator, told the committee it voluntarily complies with BSA/FinCEN rules and already applies for state money‑transmitter licenses in many states and supports clear state licensing.
Committee members and the commissioner discussed tradeoffs. A narrow approach — treating any kiosk operator as a money transmitter — would rely on existing law but leave gaps because many financial institutions and national banks are exempt from state money‑transmitter rules. A broader solution discussed with stakeholders would create a new Wyoming kiosk license and give the banking commissioner rulemaking authority to impose transaction limits, disclosure and reporting requirements, and time windows for new users to reduce scam velocity.
The committee did not adopt final statutory language at this meeting. Members directed staff and the commissioner to draft a focused licensing approach (either via a new chapter or a clear statutory hook for rulemaking) for consideration at a subsequent meeting or as a standalone bill. Law enforcement and banking witnesses recommended short deadlines for existing operators to obtain required licenses if a statute is enacted.
