Bitcoin of America, a crypto and Bitcoin ATMs provider, agreed with the Connecticut Department of Banking to cease operations due to the lack of a license as a money transmitter to operate Bitcoin ATM kiosks in the state.
In a statement issued on May 22, the Department of Banking emphasized that Bitcoin of America lacked the required license to operate Bitcoin ATM terminals within the state.
Nonetheless, as mentioned earlier, the consent order was enforced after four Connecticut consumers lost tens of thousands of dollars in a scam involving the terminals. 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 terminals.
According to him, investors are frequently persuaded and duped into depositing cash into the kiosks and transferring an equal quantity of cryptocurrencies to the con artists.
Bitcoin of America, which facilitates the transmission of consumer funds to third parties, must obtain a money transmitter license.
Connecticut’s state legislature is considering a bill requiring the licensing of digital currency terminals as money transmitters and imposing 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 terminals were seized in March on suspicion of being used in scams.
Global geopolitical instability, compounded by a crackdown on unlicensed operations, has harmed the Bitcoin ATM network as a whole.
Alone in March, 3,627 cryptocurrency ATMs fell offline, representing the largest monthly decline ever recorded.
During the four months between September 2022 and March 2023, the number of net crypto ATM installations decreased.
