Bitcoin of America, a well-known cryptocurrency ATM operator, will cease operations there. This decision has been made with the consent of the Connecticut Department of Banking. The company made this choice because it was unable to secure the required money transmitter license to operate Bitcoin ATM kiosks.
According to the Department of Banking, scammers utilized Bitcoin of America’s kiosks in a scam. It caused significant financial losses for Connecticut. As a result, the authorities executed the consent order.
“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.”
Jorge Perez, the banking commissioner for Connecticut, has cautioned against using unauthorized cryptocurrency kiosks. He emphasized that scammers frequently exploit these kiosks to deceive investors into depositing cash. The scammers then convince investors to transfer an equal quantity of cryptocurrencies to them.
Proposed Legislation and Scam Warnings Impact Bitcoin ATM Network
Lawmakers in the state assembly are proposing legislation to impose stronger rules regarding digital currency kiosks. The proposed legislation also calls for the licensing of these kiosks as money transmitters in Connecticut, aiming to address concerns and enhance consumer protection.
The Connecticut State Police, Department of Banking, Office of the Attorney General, and Department of Consumer Protection jointly issued a scam alert, warning against the use of unlicensed cryptocurrency and Bitcoin ATMs.
This incident in Connecticut follows a similar one in Ohio, where authorities confiscated 52 Bitcoin of America ATMs and kiosks in March on suspicion of their involvement in scams.
Geopolitical instability and an intensified crackdown on unlicensed businesses have contributed to a decline in the total Bitcoin ATM network. The number of offline crypto ATMs in March alone reached 3,627, marking the highest monthly fall in crypto ATM history.
Regulatory bodies and law enforcement organizations are prioritizing consumer protection as the cryptocurrency industry develops. Moreover, they are actively establishing frameworks to mitigate risks associated with unlicensed operations in the sector.