- Bitcoin of America, a provider of cryptocurrency and Bitcoin ATMs, has reached an agreement with the Connecticut Department of Banking to cease its operations as it lacks the necessary licensing.
- Banking Commissioner Jorge Perez cautioned against utilizing unlicensed cryptocurrency kiosks, highlighting that individuals are frequently deceived into depositing cash into these kiosks while transferring an equivalent amount of cryptocurrencies to the fraudsters.
Bitcoin of America, a provider of cryptocurrency and Bitcoin ATMs, has reached an agreement with the Connecticut Department of Banking to cease its operations as it lacks the necessary licensing.
On May 22, the Department of Banking issued a statement emphasizing that Bitcoin of America did not acquire the required license to operate Bitcoin ATM kiosks in the state. However, the consent order was implemented following an incident where four Connecticut consumers were defrauded of significant sums of money through the use of those particular kiosks. The state disclosed this information.
“As a result of the consent order, Bitcoin of America made restitution to these consumers totaling $86,000. Following a criminal indictment, Bitcoin of America is winding down operations here in Connecticut.”
Why are unlicensed cryptocurrency kiosks risky?
Banking Commissioner Jorge Perez cautioned against utilizing unlicensed cryptocurrency kiosks, highlighting that individuals are frequently deceived into depositing cash into these kiosks while transferring an equivalent amount of cryptocurrencies to the fraudsters.
Bitcoin of America, a platform that facilitates the transfer of funds from consumers to third parties, must obtain a license as a money transmitter. The state legislature is currently in the process of enacting legislation to establish stricter regulations and safeguards for consumers, while also mandating that digital currency kiosks in Connecticut be licensed as money transmitters.
Furthermore, the Connecticut State Police, Department of Banking, Office of the Attorney General, and the Connecticut Department of Consumer Protection jointly issued a warning about the use of unlicensed crypto and Bitcoin ATMs, alerting the public to potential scams associated with these unauthorized machines.
In March, 52 Bitcoin of America ATMs and kiosks suspected of being used in scams were confiscated in Ohio.
Related: Australia Dominates Bitcoin ATM Market: Outperforms Asia in Installations
The worldwide geopolitical instability, along with increased enforcement against unlicensed operations, has had an adverse impact on the global Bitcoin ATM network. In March, a staggering 3,627 crypto ATMs went offline, marking the largest monthly decline ever recorded for crypto ATMs.
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