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Assembly committee releases bill to regulate virtual-currency kiosks
Summary
The Assembly committee released A5384, the Virtual Currency Kiosk Consumer Protection Act, after proponents including kiosk operators and convenience-store groups testified in favor of signage, licensing and location requirements to inform and protect consumers.
The Assembly Committee released Assembly Bill A5384 on a motion in committee after hearing testimony from cryptocurrency-kiosk operators and convenience-store trade groups.
A5384 would require owners or operators of kiosks that exchange fiat currency and virtual currency to display notices and disclosures to customers, including that virtual currency is not legal tender and warnings about scams, and would require kiosk operators to obtain a money-transmitter license from the Department of Banking and Insurance. A proposed amendment would require signage stating that a kiosk is not an ATM that dispenses U.S. dollars and would limit kiosk placement to secure areas with functional security cameras and lighting.
David Smith, PPAG, on behalf of CoinFlip, said, "This legislation, protects consumers. It puts provisions in place, for an industry right now that that doesn't have, a tremendous amount of regulations across the board." He told the committee CoinFlip operates about "6,000 kiosks worldwide" and has several hundred in New Jersey.
Eric Lomgren of the New Jersey Gasoline Convenience Store Association said small businesses hosting kiosks receive a steady revenue stream and increased foot traffic and that the bill strikes a balance between consumer protection and allowing a useful business product. "I think this bill does that and I think it's a much better direction to go in than any sort of, wholesale ban on it," Lomgren said.
Committee members asked no substantive follow-up questions during the hearing. On the motion to release the bill from committee, recorded affirmations included Assemblyman Sharpenberger, Assemblywoman McCann Stamato, Assemblyman Hutchison, Assemblywoman Koyasas Gill, Vice Chairwoman Spade and Chairman Stanley; the committee announced the bill was released.
The bill now moves toward further consideration in the Assembly. Supporters argued the licensing and disclosure requirements will give consumers clearer information about kiosk transactions and reduce scam risk; trade groups said amendments improve consumer safeguards while preserving revenue for small retailers hosting the machines.
Votes at a glance: A5384 — motion to release passed in committee (bill released).
