Bill Text: AZ HB2387 | 2025 | Fifty-seventh Legislature 1st Regular | Introduced
Bill Title: Cryptocurrency kiosk; license; fraud prevention
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced) 2025-02-18 - House COM Committee action: Do Pass Amended, voting: (9-0-0-1-0-0) [HB2387 Detail]
Download: Arizona-2025-HB2387-Introduced.html
|
REFERENCE TITLE: cryptocurrency kiosk; license; fraud prevention |
|
State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025
|
|
HB 2387 |
|
|
|
Introduced by Representatives Marshall: Way
|
AN ACT
amending title 6, chapter 12, article 1, arizona revised statutes, by adding section 6-1236; relating to money transmission.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 6, chapter 12, article 1, Arizona Revised Statutes, is amended by adding section 6-1236, to read:
6-1236. Cryptocurrency kiosk operator; license; attorney general; fraud prevention; definitions
A. Beginning January 1, 2026, a cryptocurrency kiosk operator shall obtain a license pursuant to this section on a form and in a manner as prescribed by the department in order to conduct a virtual business or advertise a virtual business.
B. A cryptocurrency kiosk operator shall provide a list of any cryptocurrency kiosks that the operator owns, in whole or in part, operates or manages in this state to any governmental entity on request.
C. A cryptocurrency kiosk operator may not locate or allow a third party to locate a cryptocurrency kiosk in this state unless the cryptocurrency kiosk operator is licensed to perform money transmission pursuant to this article.
D. A cryptocurrency kiosk operator shall notify the department within ten business days if there are changes to any of the following:
1. The company's legal name.
2. A trade name or fictitious name.
3. The physical address.
4. An addition of a new cryptocurrency kiosk.
5. A change in the location of a cryptocurrency kiosk.
6. The removal of a cryptocurrency kiosk.
7. The virtual currency address that is associated with the cryptocurrency kiosk.
E. In addition to the record REQUIREMENTS as prescribed in section 6-1221, a cryptocurrency kiosk operator shall maintain as secured, encrypted data, all of the virtual currency business activity with or on behalf of an individual or entity for at least five years after the date of the activity, a record of:
1. Each transaction of the cryptocurrency kiosk operator, including all of the following:
(a) The identity of the individual or entity.
(b) The form of the transaction.
(c) The amount, date and payment instructions given by the individual or entity.
(d) The ACCOUNT number, name and united states postal service address of the individual and any other parties to the transaction, if the information is available.
2. The aggregate number of transactions and aggregate value of transactions that are provided in a united states dollar equivalent of virtual currency for the previous twelve calendar months.
3. Each transaction for which the cryptocurrency kiosk operator exchanges one form of virtual currency for money.
4. The name, account number and united states postal service address of each bank the cryptocurrency kiosk operator uses to conduct virtual business activity.
5. A report of any dispute with the individual or entity.
6. A report of any virtual currency business activity transaction with or on behalf of an individual or entity that the licensee was unable to complete.
7. The name and contact information of the cash servicing or armor car company the licensee uses to service cryptocurrency kiosks.
F. The attorney general shall enforce this section. Any act or practice that violates this section is a violation of this chapter and section 44-1522.
G. A cryptocurrency kiosk operator shall disclose in a clear, conspicuous and easily readable and understandable manner in the chosen language of the customer all relevant terms and conditions that are generally associated with the products, services and activities of the cryptocurrency kiosk operator and virtual currency. The cryptocurrency kiosk operator shall receive an acknowledgment of receipt of all disclosures required under this section from a customer through confirmation or consent.
H. A cryptocurrency kiosk operator shall provide the following disclosures separately in a font that contrasts with the background where the written warning appears and the customer must accept the disclosures before executing a cryptocurrency transaction.
1. Warning: Consumer fraud often starts with contact from a stranger who is initiating a dishonest scheme or a criminal or fraudulent activity that may appear in many forms, including any of the following:
(a) Claims of a frozen bank account or credit card.
(b) Claims of a Fraudulent bank transaction.
(c) Claims of identity theft or an offer of employment in exchange for payment.
(d) Requests for a payment to a government agency or company.
(e) Requests for disaster relief donations or loans.
(f) Offers to purchase lottery tickets or sweepstakes or drawings for vehicles.
(g) Prompts to click on desktop pop-ups that include virus warnings or communication from alleged familiar merchants.
(h) Communication from someone impersonating a representative of your bank or a law enforcement officer.
If you believe you have been scammed, stop and call your local law enforcement and the cryptocurrency kiosk operator.
2. Warning: Losses due to fraudulent or ACCIDENTAL transactions are not recoverable. Transactions in virtual currency are irreversible. People may use virtual currency transactions to steal your money by impersonating the government, organizations or people you know. Impersonators may threaten jail time, say your identity has been stolen, allege your computer has been hacked, insist you withdraw money from your bank account to purchase virtual currency or use a number of other scams. Do not disclose your private key that is associated with your virtual wallet to a third party. if you believe you are being scammed, stop and call your local law enforcement and the cryptocurrency kiosk operator.
I. a cryptocurrency kiosk transaction is allowed if the following information is disclosed to a consumer:
1. A warning that once a cryptocurrency kiosk transaction is completed, the cryptocurrency kiosk transaction may not be reversed.
2. A cryptocurrency kiosk operator's liability for unauthorized virtual currency transactions.
3. A cryptocurrency kiosk customer's liability for unauthorized currency transactions.
4. A warning that Virtual currency is not government-issued tender, is not backed by the government and is not insured by the federal deposit insurance corporation, the national credit union administration or the securities investor protector corporation.
5. A warning that some virtual currency transactions are deemed to be made when recorded on a public ledger, which may not be the date or time when the individual initiates the cryptocurrency kiosk transaction.
6. A warning that the Virtual currency's value may be derived from market participants' willingness to exchange government-backed currency for virtual currency, which may result in a permanent and total loss of a particular virtual currency's value if the market for that virtual currency disappears.
7. A warning that an individual or entity that accepts virtual currency as payment today is not required to accept and may not accept virtual currency in the future.
8. The volatility and unpredictability of the price of virtual currency relative to fiat currency that may result in a significant loss over a short period of time.
9. The nature of virtual currency means that any technological difficulties experienced by cryptocurrency kiosk operators may prevent access to, use of or total loss of an individual's virtual currency.
10. Any bond maintained by the cryptocurrency kiosk operator for the benefit of an individual may not cover all losses an individual incurs.
11. The amount of the transaction denominated in united states dollars as well as the applicable virtual currency.
12. Any fees or expenses charged by the cryptocurrency kiosk operator.
13. Any applicable exchange rates.
14. A virtual currency transaction limit of not more than $1,000 per day.
15. Notice of a change in the cryptocurrency kiosk operator's rules or policies.
16. The accurate name, address and telephone number of the owner of the cryptocurrency kiosk and the days, times and means by which a consumer can contact the owner for consumer assistance, which must be displayed at the location or on the first screen of a cryptocurrency kiosk, and contact information for a state and local law enforcement or governmental agency that receives fraud reports.
17. A list of specific circumstances in which a cryptocurrency kiosk operator may disclose an individual's account information to third parties without a court order or government order.
J. On the completion of each cryptocurrency kiosk transaction, the cryptocurrency kiosk operator shall provide an individual with a physical receipt in the LANGUAGE chosen by the individual that contains all of the following information:
1. The cryptocurrency kiosk operator's name and contact information, including a telephone number to answer questions and register complaints.
2. The state and local law ENFORCEMENT or GOVERNMENT agency that receives complaints of fraud.
3. The type, value, date and precise time of a transaction, the transaction hash and each applicable virtual currency address.
4. The name and contact information of the sender.
5. The name, contact information and virtual wallet number of the designated recipient.
6. DAI fees charged. For the purposes of this paragraph, "DAI" means a decentralized stablecoin token that is designed to maintain a value of the united states dollar.
7. The exchange rate of the virtual currency to the united states dollar.
8. A statement of the cryptocurrency kiosk operator's refund policy.
9. Any additional information that a government authority may require.
K. A cryptocurrency kiosk operator shall use blockchain analytics AND tracing software to help prevent fraud by sending purchased virtual currency from a cryptocurrency kiosk operator to a virtual wallet known to be affiliated with fraud at the time of a transaction. A relevant government authority may request evidence from any cryptocurrency kiosk operator of current use of blockchain analytics.
1. All cryptocurrency kiosk operators shall take reasonable steps to detect and prevent fraud, including establishing and maintaining a written anti-fraud policy and conforming to federal know your consumer and anti-money laundering laws. The anti-fraud policy shall, at a minimum, include:
(a) The identification and assessment of fraud related to risk areas.
(b) The procedures and controls to protect against identified risks.
(c) The allocation of RESPONSIBILITY for monitoring risks.
(d) The procedures for the periodic evaluation and revision of the anti-fraud procedures, controls and monitoring mechanisms.
2. A cryptocurrency kiosk operator shall designate and employ a compliance officer with all of the following requirements:
(a) the Ability to coordinate and monitor compliance with this section and other applicable federal and state laws, rules and regulations.
(b) Full-time employment by the cryptocurrency kiosk operator.
(c) may Not own more than twenty percent of the cryptocurrency kiosk operator.
L. A cryptocurrency kiosk operator may not accept transactions of more than $1,000 united states dollars in cash or the equivalent in virtual currency in one day from a customer in this state through one or more cryptocurrency kiosks.
M. All cryptocurrency kiosk operators performing business in this state shall provide live customer service at a minimum of twenty-four hours a day, seven days per week. The customer service toll-free number shall be prominently displayed on the cryptocurrency kiosk or the cryptocurrency kiosk screens.
N. For the purposes of this section:
1. "Blockchain analytics" means the analysis of data from blockchains or public distributed ledgers, including associated transaction information.
2. "Blockchain analytics and tracing software" means a software service that uses blockchain analytics data to provide risk-specific information and tracing of virtual currency wallet addresses, among other virtual items.
3. "Cryptocurrency kiosk":
(a) Means a physical, electronic terminal that is a mechanical agent of the cryptocurrency kiosk operator and that enables a cryptocurrency kiosk operator to facilitate the purchase, sale or exchange of cryptocurrency for money, bank credit or other virtual currency.
(b) Includes a virtual currency exchange, which performs the actual virtual currency transmission or drawing on the virtual currency that is in the possession of the electronic terminal operator.
4. "Cryptocurrency kiosk operator" means an individual or entity:
(a) That engages in virtual currency business activity through a money transmission kiosk in this state.
(b) That operates or manages a money transmission kiosk where virtual currency business activity is offered in this state.
5. "Cryptocurrency kiosk transaction" means both:
(a) A transaction conducted or performed, in whole or in part, by electronic means through a cryptocurrency kiosk.
(b) A transaction MADE at a cryptocurrency kiosk to purchase virtual currency with fiat currency or to sell virtual currency for fiat currency.
6. "Transaction hash" means a unique identifier made up of a string of characters that act as a record of, and provide proof that, the transaction was verified and added to the blockchain.
7. "Virtual currency address":
(a) Means a unique public alphanumeric identifier that is ASSOCIATED with a virtual currency type and wallet and that identifies the location where virtual currency transaction can be sent.
(b) Is referred to as a public key.
8. "Virtual wallet":
(a) Means a software application or other mechanism that provides a means to hold, store or transfer virtual currency or nonfungible tokens.
(b) Includes a public key, private key and a public receiving address. For the purposes of this subdivision, a private key may be used to sign for a transaction when sending cryptocurrency from a virtual wallet.
