Bitcoin of America, a leading provider of cryptocurrency and Bitcoin ATMs, has reached an agreement with the Connecticut Department of Banking (DOB) to cease operations in the State amid licensing concerns.
The DOB issued a statement on May 22, 2023, stating that Bitcoin of America had failed to obtain the necessary authorization to operate Bitcoin ATM kiosks in Connecticut. The Department noted that four Connecticut residents were victims of a scam involving these kiosks, which resulted in significant financial losses.
The Department and the Bitcoin of America settled via a consent order. Under this order, Bitcoin of America has agreed to compensate the affected customers by providing $86,000 in restitution. Additionally, in response to criminal charges related to the scam, Bitcoin of America has decided to close its offices in Connecticut.
In the statement, Jorge Perez, the Commissioner of the Department, issued a stern warning against using unregistered cryptocurrency kiosks. He noted investors often fall victim to deception and depositing cash at these kiosks.
Meanwhile, in a joint effort, the Connecticut State Police, Department of Banking, Office of the Attorney General, and Connecticut Department of Consumer Protection have issued a scam notice cautioning the public against utilizing unlicensed cryptocurrency and Bitcoin ATMs.
In response to these recent events, the Connecticut Department of Banking and State Police submitted a bill to the State legislature to introduce additional regulations and enhance consumer protections.
The proposed measures would mandate the registration of digital currency kiosks as money transmitters in the State. Thus, Digital Asset Service Providers like Bitcoin of America will be required to obtain a money transmitter license to facilitate secure fund transfers between customers and other parties.
The global geopolitical unrest and heightened crackdown on illegal crypto businesses have adversely affected the overall Bitcoin ATM network. According to data from Crypto ATM Radar, more than 400 Bitcoin ATMs ceased operations in the first two months of 2023. Of these, 289 machines have stopped working, while 123 others have been taken offline, resulting in a total of 412 non-operational crypto ATMs.
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