Mass. bill would regulate virtual-currency kiosks, mandate disclosures and fraud protections

Sen. John J. Cronin filed Senate Bill No. 707 on Jan. 15, 2025, proposing a new Chapter 167K to the General Laws that would regulate virtual-currency kiosks used to buy and sell cryptocurrencies in Massachusetts. The bill would require kiosk operators to hold a state money-transmitter license, register each kiosk with the commissioner of banks and submit quarterly location reports listing legal names, addresses, operation start dates and associated virtual-currency addresses.

The bill’s core consumer protections would force kiosk operators to present clear, language-appropriate disclosures and obtain customer acknowledgement. The measure requires a prominent, bold-faced warning that virtual-currency transactions are irreversible and that fraudulent or accidental transactions are not recoverable. It also lists material risks to customers, including that virtual currency is not legal tender or government-insured, that transaction timing may reflect when a public ledger records the transfer rather than when a user initiates it, and that values can become worthless if market demand vanishes.

Receipts. Under the proposal, each completed kiosk transaction must produce a physical receipt in the customer’s chosen language that includes the operator’s contact information, the transaction hash, precise date and time, sender and recipient contact information, fees, the exchange rate to U.S. dollars, the operator’s liability statement for delayed or non-delivery, and the operator’s refund policy.

Fraud prevention and blockchain analytics. The bill would require operators to use blockchain analytics software to help prevent sending purchased virtual currency to wallet addresses known to be affiliated with fraudulent activity at the time of a transaction; the commissioner of banks may request evidence of current use. Operators must maintain a written anti-fraud policy addressing risk identification, procedures and controls, responsibility allocation, and periodic review. Each operator must designate a full-time compliance officer qualified to coordinate and monitor compliance; that officer may not be an owner holding more than 20% of the operator.

Refund rules and reporting windows. The proposal defines a “new customer” as an individual in the 30-day period after a first transaction. A new customer fraudulently induced into transactions would be eligible for a full refund of all transaction amounts upon request if the customer notifies the operator and a government or law-enforcement agency within 90 days of the last transaction occurring during the 30-day new-customer window. Existing customers who are fraudulently induced may obtain a refund of transaction fees if they report the fraud to the operator and law enforcement within 90 days.

Transaction and fee limits. The bill imposes a daily per-customer transaction cap of $1,000 (U.S. dollars or virtual-currency equivalent). It also caps aggregate fees on a single transaction or related series at the greater of $5.00 or 3 percent of the U.S.-dollar equivalent of the virtual currency involved.

Customer service and operational requirements. Operators performing business in the state would have to provide live customer service at minimum Monday through Friday, 8 a.m. to 10 p.m. Eastern, and display a toll-free customer-service number on the kiosk or its screens. Operators must also disclose, on or at the kiosk or on the first kiosk screen, the owner’s name, address and telephone number and the hours and means to contact the owner for assistance.

State treasurer module and special commission. The bill would add a section to Chapter 10 directing the state treasurer’s office to develop and periodically review a digital education module on virtual currencies and digital assets, with curricula specifically tailored to older adults and fraud prevention. The bill also creates a 25-member special commission chaired by the speaker of the House and the Senate president (or designees) to study blockchain technology, privacy and security risks, tax impacts, potential agency oversight, energy consumption related to virtual currency, and best practices for expanding blockchain in the Commonwealth. The commission’s appointments must be made within 45 days of the act’s effective date, the chairs must meet within 90 days, and the commission must report and file recommended legislation within one year after all appointments are made.

Legislative status. The text is presented as a Senate docket petition (Senate No. 707) filed Jan. 15, 2025. As drafted, it would take effect upon passage. It is a proposed statute; the bill itself contains no recorded votes or enacted outcomes in the provided text.

Petitioners. The bill is presented by Sen. John J. Cronin. Co-petitioners named on the filing include Sen. Joanne M. Comerford (Hampshire, Franklin and Worcester), Sen. Peter J. Durant (Worcester and Hampshire), Sen. Patricia D. Jehlen (Second Middlesex), Sen. Michael D. Brady (Second Plymouth and Norfolk) and Sen. Sal N. DiDomenico (Middlesex and Suffolk).