Bitcoin of America, an ATM provider, has consented with the Connecticut Department of Banking to halt its operations due to a lack of licensing. This move comes after the company failed to obtain the proper license to operate Bitcoin ATM kiosks in the state. The consent order was enforced following a scam involving the kiosks, which resulted in several consumers losing tens of thousands of dollars.
The Connecticut Department of Banking highlighted Bitcoin of America’s failure to acquire the necessary license to operate its Bitcoin ATM kiosks within the state. As a result, the company has been forced to cease its operations. The consent order was specifically issued after four Connecticut consumers fell victim to a scam associated with the unlicensed kiosks. These individuals collectively lost $86,000.
Consumer Restitution and Criminal Indictment
Bitcoin of America made restitution to the affected consumers, compensating them for their losses. However, the company is now winding down its operations in Connecticut following a criminal indictment related to the scam. This incident serves as a reminder of the risks associated with unlicensed crypto kiosks and the potential for fraudulent activities in the cryptocurrency space.
Connecticut’s banking commissioner, Jorge Perez, issued a warning against the use of unlicensed crypto kiosks, emphasizing the deceptive practices employed by scammers. Investors are often urged and tricked into depositing cash into these kiosks and transferring an equivalent amount of cryptocurrencies to the fraudsters. To address this issue, legislation is being introduced in the state legislature to implement stricter regulations and consumer protections. The proposed legislation would require digital currency kiosks to obtain a license as money transmitters.
In response to the growing concern surrounding unlicensed crypto and Bitcoin ATMs, the Connecticut State Police, Department of Banking, Office of the Attorney General, and the Connecticut Department of Consumer Protection have jointly issued a scam alert. The alert aims to raise awareness among consumers about the risks associated with using unlicensed ATMs and urges caution when engaging with such services.
Global Geopolitical Instability and Decline in Crypto ATM Network
The recent crackdown on unlicensed operations, combined with geopolitical instability across the globe, has had a negative impact on the overall Bitcoin ATM network. In March alone, the largest-ever monthly decline in crypto ATMs was recorded, with 3,627 machines going offline. The confiscation of 52 Bitcoin of America ATMs and kiosks suspected of involvement in scams in Ohio further highlights the challenges faced by the industry.