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Senate Banks Committee advances bill to license cryptocurrency kiosks after members question fraud and ownership risks
Summary
Senate Bill 9891, to license operators of cryptocurrency ATMs/kiosks, was advanced out of the Senate Banks Committee after members questioned potential fraud risks and who would operate the machines. A committee presenter said the bill would require kiosk operators to be licensed and noted several other states have taken similar actions.
The Senate Banks Committee advanced Senate Bill 9891, a proposal to amend the banking law to regulate cryptocurrency kiosks and require operators to obtain licenses.
During committee discussion, members asked how the kiosks would work, who would own them and whether they could expose vulnerable consumers to fraud. ‘‘We—ve seen fraud. Huge,’’ one member said, and questioned whether seniors are being targeted or would be protected by this proposal.
A presenter explained the bill would require the operator of a kiosk to be licensed and compared the machines to an ATM combined with an exchange: ‘‘It—s essentially a kiosk and an ATM, but for cryptocurrency exchange,’’ the presenter said, noting that about a dozen states have taken some form of regulatory action covering crypto ATMs and exchanges. The presenter added that New York—s Department of Financial Services regulates virtual currencies generally but had not yet issued an opinion on this specific bill.
Committee members pressed whether the bill would create or remove barriers to access and how consumer-protection oversight would be enforced. Chair Sen. James Sanders Jr. said the committee—s handling would allow Department of Financial Services input before consumer affairs consideration. The bill was moved, seconded and reported out of committee to consumer affairs.
Next steps: the bill was reported out of committee and will be referred to consumer affairs for further review and any required agency guidance.
