Bitcoin of America, an Over the Counter (OTC) cryptocurrency exchange and a national Bitcoin kiosk operator, has been ordered to refund $86,000 to consumers in Connecticut, according to a recent announcement by state Banking Commissioner Jorge Perez.
The company, known for its nationwide presence with Bitcoin or BTM ATMs, had been operating these kiosks without obtaining the necessary money transmitter license in Connecticut. These kiosks allowed consumers to purchase virtual currency using cash. However, four consumers in the state suffered substantial losses due to scams perpetrated through these unlicensed kiosks. This led to a settlement, and the company is now shutting down its operations in the state following a criminal charge.
Commissioner Perez stated, “This case underscores the importance of vigilance when using virtual currency kiosks.” He emphasized the department’s commitment to ensuring that kiosk owners and operators comply with state licensing laws and regulations.
Victims were tricked into depositing cash at the kiosks using a QR code provided by the scammers, believing they were safeguarding their money. They were actually unknowingly buying virtual currency, which was then transferred to the scammers’ digital wallets, resulting in the loss of their funds.
In an effort to address this growing problem, the Connecticut State Department of Banking and Police introduced a bill, HB 6752, a digital asset law. The bill seeks to mandate that virtual currency kiosks be licensed as money transmitters, giving the Commissioner jurisdiction over these machines and their operators. It is also intended to provide additional protections, including clear on-screen disclosures for the consumer and additional safeguards for first-time kiosk users.
Expressing his gratitude to the Connecticut State Police for their assistance in the case, Commissioner Perez also shared that the Department of Banking, along with the Connecticut State Police, the Office of the Attorney General, and the Department of Consumer Protection, has issued an alert with tips to help consumers avoid falling victim to these types of scams in the future.