Cryptocurrency and Bitcoin (BTC) ATM provider, Bitcoin of America, consented with the Connecticut Department of Banking to halt its operations due to a lack of licensing.
In a statement released on May 22, the Department of Banking highlighted that Bitcoin of America failed to obtain a proper license to operate Bitcoin ATM kiosks in the state. However, the consent order was enforced after four Connecticut consumers lost tens of thousands of dollars in a scam involving the kiosks in question. The state revealed:
“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.”
Banking commissioner Jorge Perez issued a warning against the use of unlicensed crypto kiosks. He stated that investors are often urged and tricked into depositing cash into the kiosks and transferring an equal amount of cryptocurrencies to the scammers.
Bitcoin of America — which allows the transfer of consumers’ funds to third parties — is required to be licensed as a money transmitter. Legislation is making its way through the state legislature to put more regulations and consumer protections in place and demand the licensing of digital currency kiosks as money transmitters in Connecticut.
In addition, the Connecticut State Police, Department of Banking, Office of the Attorney General and the Connecticut Department of Consumer Protection issued a scam alert against the use of unlicensed crypto and Bitcoin ATMs.
In March, 52 Bitcoin of America ATMs and kiosks suspected of being used in scams were confiscated in Ohio.
Geopolitical instability across the globe, compounded by a crackdown on unlicensed operations, has had a negative effect on the overall Bitcoin ATM network. In March alone, 3,627 crypto ATMs went offline, recording the largest-ever monthly decline of crypto ATMs.
As shown above, net crypto ATM installations declined for four months between September 2022 and March 2023.