Bitcoin of America was told by the Department of Banking that they did not get the necessary license to run Bitcoin ATM machines in Connecticut.
Bitcoin ATM provider Bitcoin of America agreed with the Connecticut Department of Banking to stop its operations because they didn’t have the right license. As a result, the prices of cryptocurrencies like Bitcoin BTC dropped by $27,308.
According to a statement on May 22, the Department of Banking stated that Bitcoin of America did not get the necessary license to run Bitcoin ATM machines in Connecticut. The consent order to stop their operations was put in place after four people from Connecticut lost a lot of money in a scam related to those machines.
Because of the agreement, Bitcoin of America had to give back $86,000 to the people who lost money. Additionally, due to facing criminal charges, Bitcoin of America is gradually closing its operations in Connecticut.
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After the incident, Commissioner Jorge Perez issued a warning about unlicensed crypto kiosks. He said that scammers often convince and deceive investors into putting money into the kiosks and transferring the same amount of cryptocurrencies to the fraudsters.
Bitcoin of America’s way of doing business involves transferring customers’ money to other individuals or companies, which means they needed a license as a money transmitter. To address this problem on a larger scale, the Department of Banking and the Connecticut State Police worked together to propose a bill called HB 6752, also known as the “Act Concerning Digital Assets.” This bill requires virtual currency kiosks to obtain licenses as money transmitters in the state of Connecticut.
Furthermore, the Department of Banking, the Connecticut State Police, the Office of the Attorney General, and the Department of Consumer Protection issued a warning to the public about scams involving unlicensed crypto and Bitcoin ATMs. They advised people to be cautious and avoid using these unregulated machines.
In March, 52 Bitcoin of America ATMs and kiosks were taken away in Ohio due to suspicions that they were involved in scams.
The instability in different parts of the world and efforts to stop unlicensed operations had a negative impact on the Bitcoin ATM network. In March, a total of 3,627 crypto ATMs went offline, which was the biggest drop in a single month for these types of ATMs.
Net change of cryptocurrency machines number installed and removed monthly. Source: Coin ATM Radar
As seen in the information provided, the number of newly installed crypto ATMs decreased for four months from September 2022 to March 2023.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
