Vermont regulators outline consumer protections as committee weighs crypto-kiosk moratorium and limits

The Department of Financial Regulation (DFR) told the House Commerce & Economic Development Committee on Feb. 6 that a moratorium and new licensing rules enacted last year sharply reduced crypto kiosk activity in Vermont and proposed additional protections aimed at fraud prevention.

Aaron Ference, deputy commissioner for DFR’s banking division, told the committee the report — required by recently passed legislation (title 8, section 25 77) — found a 96% drop in kiosk transactions between the second quarter before the moratorium and the third quarter after it took effect. "If you don't have the machines, you can't be directed to them to use them for illicit purposes," Ference said.

The law enacted a $1,000 daily transaction limit per customer, fee limits (the higher of $5 or 3% of the transaction), and a one-year moratorium on licensure of new kiosk locations; existing machines operating legally as of the law's effective date were grandfathered. Ference said Vermont had 36 machines before the new law; one operator voluntarily surrendered a license and left the state after DFR identified compliance issues. DFR reported there now are three licensed kiosks in Vermont (Essex, Norwich and Brattleboro), all operated by the same entity.

DFR recommended several additional consumer protections, including a full refund for new customers if they report a problem within seven days; partial fee refunds for other victims; mandatory reporting timelines for consumers to notify law enforcement or regulators; positive ID verification at the kiosk to prevent scammers from using multiple false accounts; mandatory live customer support; mandatory live screening for persons 60 and older and for customers conducting more than $5,000 of transactions within any 10‑day period; receipts showing the public wallet address; and emailing transaction details to customers. The report also recommended re-evaluating the fee cap (DFR had originally sought 15%).

Stakeholders in the hearing responded with differing views. Colin Hilliard of AARP Vermont said kiosks present serious fraud risks and urged a longer refund window (AARP recommended 30 days). Representatives of Vermont banks described frontline interventions—bank staff conversations and holds, such as New Hampshire’s 15‑day hold on some transactions—as an effective deterrent in some cases. Multiple committee members questioned whether kiosks provide sufficient public benefit to remain widely available outside financial institutions.

No state has, to DFR’s knowledge, fully banned kiosks, though several states have enacted transaction limits and fee caps. Committee members discussed three broad options: extend/strengthen Vermont’s moratorium and protections, restrict kiosks to financial institutions (which would effectively reduce public exposure), or ban kiosks outright. Several committee members said they would invite the attorney general to weigh in on legal risks before any statutory action.

Why it matters: DFR reported a steep decline in on‑site kiosk transactions since the moratorium, but testified that Vermonters can still acquire cryptocurrency through apps and out‑of‑state kiosks. The committee must weigh consumer-protection measures against access and potential legal risk as the moratorium’s June 30 expiration approaches.