Cryptocurrency and Bitcoin, ATM provider Bitcoin Corporation of America has agreed with the Connecticut Department of Banks to cease operations due to lack of a license.
In a statement released on May 22, the Department of Banking highlighted that Bitcoin America had failed to obtain the proper licenses to operate Bitcoin ATM kiosks in the state. However, the consent order was enforced after four Connecticut consumers lost tens of thousands of dol lars in a scam involving related kiosks. The state revealed:
“Based on the consent order, Bitcoin of America paid these consumers a total of $86,000. Following the criminal prosecution, Bitcoin of America will cease operations in Connecticut.” Banking Commissioner Jorge Perez issued a warning against the use of unlicensed encrypted kiosks. Investors are often egged and tricked into depositing cash into kiosks and transferring an equivalent amount of cryptocurrency to crooks, he said.
Bitcoin in the US which allows the transfer of consumers' funds to third parties - requires a license to act as a money transmitter. Legislation is moving through the state legislation to create more regulations and consumer protections and require digital currency kiosks to be licensed as money transmitters in Connecticut. Additionally, the Connecticut State Police, Department of Banking, Attorney General's Office, and Connecticut Department of Consumer Protection issued scam alerts targeting the use of unlicensed cryptocurrency and bitcoin ATMs.
In March, the state of Ohio seized 52 US bitcoin ATMs and kiosks suspected of being used for fraud. Global geopolitical instability, coupled with a crackdown on unlicensed operations, has negatively impacted the entire Bitcoin ATM network. In March alone, 3, 627 crypto ATMs went offline, marking the largest single-month drop in crypto ATMs ever.
