ARIZONA HOUSE OF REPRESENTATIVES Fifty-seventh Legislature First Regular Session
	House: COM DPA 9-0-0-1 | 3^rd Read 50-8-2-0 Senate: JUDE DPA 7-0-0-0 | 3^rd Read 27-1-2-0 Final Read: 51-4-5-0 | Chapter: 171

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HB 2387: cryptocurrency kiosk; license; fraud prevention

Sponsor: Representative Marshall, LD 7

Signed by the Governor

Overview

Provides requirements for operating a cryptocurrency kiosk.

History

The Department of Insurance and Financial Institutions (DIFI) is responsible for regulating the insurance industry, financial institutions and enterprises and financial services and insurance professionals, including money transmitters and the transmission of money.

Money transmission means: 1) selling or issuing payment instruments to a person located in this state; 2) selling or issuing stored value to a person located in this state; and 3) receiving money for transmission from a person located in this state (A.R.S. § 6-1201).

Provisions

1. Requires a cryptocurrency kiosk operator to disclose, in a clear, conspicuous and readable manner, all relevant terms and conditions that are associated with the products, services and activities of the operator and virtual currency. (Sec. 1)

2. Specifies the cryptocurrency kiosk operator must receive a receipt acknowledging all required disclosures from a customer through consent or confirmation. (Sec. 1)

3. Instructs the cryptocurrency kiosk operator to separately provide outlined disclosures and requires the customer to accept both disclosures before executing a cryptocurrency transaction. (Sec. 1)

4. Requires a cryptocurrency kiosk operator, on the completion of each kiosk transaction, to provide the consumer with a physical or digital receipt containing specified information. (Sec. 1)

5. Instructs a cryptocurrency kiosk operator to use blockchain analytics and tracing software to help prevent fraud by sending purchased virtual currency from an operator to a virtual wallet known to be affiliated with fraud at the time of a transaction. (Sec. 1)

6. Allows a relevant government entity to request evidence from a cryptocurrency kiosk operator showing current use of blockchain analytics. (Sec. 1)  

7. Requires a cryptocurrency kiosk operator to 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. (Sec. 1)

8. Prohibits a cryptocurrency operator from accepting more than $2,000 U.S. dollars in cash or the equivalent in virtual currency in one day from a new customer in Arizona through one or more cryptocurrency kiosks. (Sec. 1)

9. Requires, for existing customers, a cryptocurrency kiosk operator to ensure that the cryptocurrency kiosk does not accept or dispense in a single day more than $10,500 for a single person using one or more kiosks. (Sec. 1)

10. Requires a cryptocurrency kiosk operator performing business in Arizona to provide live customer service at a minimum of 24 hours a day, 7 days per week. (Sec. 1)

11. Requires the cryptocurrency kiosk or the cryptocurrency kiosk screen to display the toll-free customer service number. (Sec. 1)

12. Stipulates, for new customers who have been fraudulently induced to engage in a cryptocurrency kiosk transaction, the cryptocurrency kiosk operator must issue a full refund including any associated fees for such transaction. (Sec. 1)

13. Requires the new customer, for receiving a full refund for the fraudulently induced transaction, must:

a) contract the cryptocurrency kiosk operator and a law enforcement agency or the AG within 30 days after the cryptocurrency kiosk transaction; and

b) provide the operator with a report from law enforcement or the AG that determines the new customer was fraudulently induced to engage in the transaction. (Sec. 1)

14. Asserts a victim of fraud is eligible to receive a refund even if the cryptocurrency kiosk operator provides the required disclosures and receipt. (Sec. 1)

15. Asserts the Attorney General (AG) enforces cryptocurrency kiosk requirements and violations are subject to consumer fraud laws. (Sec. 1)

16. Classifies individuals subject to the kiosk provisions as a new customer upon the effect date and are converted to an existing customer 10 days after becoming a new customer. (Sec. 1)

17. Defines pertinent terms. (Sec. 1)

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21.                   HB 2387

22. Initials PB           Page 0 Signed by the Governor

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