Bitcoin of America, a provider of cryptocurrency and Bitcoin ATMs, agreed with the Connecticut Department of Banking to cease operations due to a lack of licensing.
In a statement issued on May 22, the Department of Banking emphasized that Bitcoin of America lacked the required license to operate Bitcoin ATM kiosks within the state.
Nonetheless, the consent order was enforced after four Connecticut consumers lost tens of thousands of dollars in a scam involving the kiosks mentioned above. The state disclosed:
“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, issued a warning against the use of unlicensed cryptocurrency kiosks.
According to him, investors are frequently persuaded and duped into depositing cash into the stalls and transferring an equal amount of cryptocurrencies to the con artists.
Bitcoin of America, which facilitates the transfer of consumer funds to third parties, must obtain a money transmitter license.
Connecticut’s state legislature is considering a bill that would require the licensing of digital currency kiosks as money transmitters and impose additional consumer protections.
In addition, the Connecticut State Police, Department of Banking, Office of the Attorney General, and Connecticut Department of Consumer Protection also warned against using unlicensed crypto and Bitcoin ATMs.
In Ohio, 52 Bitcoin of America ATMs and kiosks were seized in March on suspicion of being used in scams. Global geopolitical instability, compounded by a crackdown on unlicensed operations, has hurt the Bitcoin ATM network as a whole.
In March alone, 3,627 cryptocurrency ATMs went offline, representing the most significant monthly decline ever recorded.
Net change of cryptocurrency machines installed and removed monthly. Source: Coin ATM Radar
During the four months between September 2022 and March 2023, the number of net crypto ATM installations decreased.
