Sen. Barry R. Finegold filed a bill Jan. 17, 2025, in the Massachusetts General Court to establish regulations for virtual currency kiosks and to require consumer protections intended to prevent fraud.

The bill, titled "An Act establishing regulations on certain virtual currencies for fraud prevention" and filed as Senate Docket No. 2398 and Senate No. 757, would add a new Section 25 to Chapter 167B of the General Laws and make an additional insertion into Chapter 10 requiring the state treasurer’s office to produce educational materials.

The measure would limit who may operate a kiosk in Massachusetts and require registration and prior approval from the commissioner before activation. It would bar kiosk operators from advertising or conducting virtual-currency business on behalf of another person unless the operator is licensed in the state as a money transmitter under Chapters 167F, 169 or 169A and applicable regulations.

Key consumer-protection provisions spelled out in the bill include: a requirement that operators disclose, in the customer’s chosen language, prominent warnings and material risks of virtual currency transactions (the bill specifies a bold warning that ‘‘losses due to fraudulent or accidental transactions are not recoverable and transactions in virtual currency are irreversible’’); disclosure of dollar-equivalent amounts and fees; display of the owner’s contact information and customer-service telephone number on or at the kiosk; and conspicuous disclosure of aggregate fees and any spread relative to prevailing market value prior to transaction confirmation.

The bill would require kiosks to provide a physical receipt after each completed transaction unless the customer requests an emailed receipt. Receipts must include the type, value, date and precise time of the transaction, the transaction hash, each applicable virtual currency address, sender and recipient contact information (if applicable), fees charged, the exchange rate to dollars, and statements describing the operator’s liability for delayed or non-delivery and its refund policy.

For fraud prevention, the bill requires virtual currency kiosk operators to use blockchain analytics software to help prevent transfers to wallet addresses known to be affiliated with fraudulent activity at the time of the transaction and allows the commissioner to request evidence of current analytics use. Operators must adopt written anti-fraud policies that identify fraud-related risk areas, set procedures and controls, allocate responsibility for monitoring, and provide for periodic evaluation. Operators also must employ a full-time compliance officer who is qualified to coordinate compliance with the section and related state and federal laws and who does not own more than 20% of the operator.

The bill sets customer protections for "new customers": a daily transaction limit of no more than $1,000 for new customers and a requirement that operators issue a full refund to a new customer for all transactions made within the 30-day new-customer period if the customer was fraudulently induced to transact and notifies the operator and local or state law enforcement within 90 days of the last transaction occurring in that 30-day period.

Operators would also be required to submit quarterly reports within 45 days of a quarter’s end listing each kiosk’s physical address, operating start date (and end date if applicable), legal and trade names and any virtual currency addresses associated with the kiosk. The bill would require live customer service at minimum during standard business hours and display of a toll-free customer-service number on the kiosk or kiosk screens.

Separately, the bill would add Section 79 to Chapter 10 of the General Laws directing the Office of the State Treasurer to develop and periodically update digital modules and resources on virtual currencies and digital assets to help Massachusetts residents manage finances, identify scams and protect security; it requires a module targeted to residents over age 50 to help that group identify scams related to virtual currencies.

The text provided is the bill as filed; the document records filing and the statutory language but does not include any committee referral, recorded votes or legislative action beyond filing. Further legislative steps, committee assignments, hearings or votes are not specified in the document.

Ending: The bill was filed Jan. 17, 2025, as Senate Docket No. 2398 and Senate No. 757; additional legislative action and timelines are not specified in the filing.