House committee advances H.137, extends kiosk moratorium and adopts consumer protections for crypto kiosks

The Vermont House Committee on Commerce and Economic Development on May 6, 2025 voted to advance H.137 to the full House after agreeing to Senate amendments that extend the existing moratorium on new cryptocurrency kiosks for one year and add several consumer-protection measures negotiated among the Department of Financial Regulation (DFR), CoinFlip and AARP Vermont.

The measure, as amended, keeps the moratorium through July 1, 2026, requires kiosk operators to register with the DFR, and imposes disclosure, refund and compliance requirements including a 30-day new-customer refund period, a 90-day window measured from the last fraudulent transaction for other refunds, and a fee disclosure with a 15% cap on transaction fees.

Why it matters: committee members said they were balancing two goals — protecting Vermonters, especially older residents vulnerable to scams, and creating a regulatory framework to allow heavily regulated operators to remain in the state so the committee can gather more data on kiosk activity and fraud rates.

Committee discussion focused on three strands: how much kiosk activity is occurring in Vermont and whether it is associated with fraud, whether the bill’s disclosures and refund windows will meaningfully protect victims, and whether the fee cap and other compliance costs make the business model viable.

Aaron Ference, deputy commissioner for banking with the Department of Financial Regulation, summarized the department’s posture: "I can't investigate fraud if someone doesn't report it to me," and said DFR is comfortable with the bill as written and will work on consumer messaging if it becomes law. Ference told the committee that, by DFR's reporting, legal Vermont kiosks recorded about $142,000 in transactions in the fourth quarter referenced earlier in the hearing (about 225 transactions) and that the moratorium began on July 1 of the prior year.

Larry, a representative of CoinFlip, the kiosk operator that worked with the department on the language, gave operating data and described blockchain analytics used by his company. CoinFlip reported 221 users in the last 12 months, about 100 new users, 665 transactions totaling $423,600, and an average transaction of $763. "Blockchain transactions are recorded permanently and publicly," Larry said, adding that transfers from an initial wallet to another wallet are not, by themselves, an indication of fraud and that compliance reviews target transfers to wallets flagged as high risk.

Colin Hilliard, advocacy director for AARP Vermont, urged the committee to keep the refund and transaction-limit language. "The 30 day new customer period with 90 days to act on that refund . . . would be one of the strongest in the country," Hilliard said, noting AARP's model language and that Vermont's protections could serve as a model for other states.

Committee members voiced divergent views. One committee member said they would prefer an outright ban and remain "still where I am" on that position; other members said they preferred keeping the moratorium while the department collects more data. Several members asked DFR to return next year with targeted data on whether kiosk transactions are going to wallets associated with fraud and how long victims typically take to identify they were scammed.

Specific policy details discussed and included in the amended language: - Registration and compliance: operators must register with DFR and maintain an in-house compliance team and a chief compliance officer who does not hold a controlling ownership stake. - Refunds: a 30-day new-customer full-refund provision and a 90-day window measured from the last fraudulent transaction for other refund claims. - Fee cap and limits: a 15% transaction-fee cap and daily transaction limits (discussion referenced a $2,000 daily threshold); CoinFlip noted the existing per-transaction limit at kiosks is $1,000. - Enhanced disclosure and customer contacts: warnings at point of sale and receipts, an obligation to call customers age 60 and older before their first transaction, and recorded calls for larger purchases to verify purpose. - Enforcement and examinations: DFR may examine operators and bill exam costs to the institution being examined.

The committee recorded two formal outcomes on the record: approval of the Senate amendment addressing financial-institution language and approval of the Senate amendment that continues the moratorium while adding the protections negotiated among DFR, CoinFlip and AARP. The transcript records a voice/hand vote in favor; no roll-call tally is included in the transcript.

DFR agreed to return with further data next year. Committee members asked DFR to include in that report: blockchain-analysis summaries showing whether kiosk-originated transactions went to wallets flagged as high risk, timing data on how long victims take to realize fraud, and a review of refund claims and compliance actions taken under the new rules.

The bill, as advanced, will be reported out to the House and could move to the governor after further floor action. Committee members said the moratorium extension provides an opportunity to collect operational data and reassess the law in 2026.

Discussion versus decision Discussion only: concerns over elders' reluctance to report romance-scam losses, whether transfers between wallets indicate fraud, and whether a 30-day new-customer refund period is long enough. Direction/assignment: DFR was asked to continue monitoring, collect blockchain-analytics summaries and return next year with data on fraud timing and refund claims. Formal action: committee approved the Senate amendments and advanced H.137 (continuing the moratorium and adopting the negotiated consumer protections); the transcript records a voice/hand vote but no numeric tally.

Ending: Committee members said they expect DFR's follow-up and will reexamine the statute after the moratorium ends; the committee is scheduled to reconvene the following day to consider other bills.