Bitcoin of America has agreed to a settlement deal with the Department of Banking to refund the four customers who lost tens of thousands through the crypto kiosks.
In a recent statement from the Banking Commissioner in Connecticut, Jorge Perez, Bitcoin of America reached a deal with the Department of Banking. The current agreement came after several customers complained of losing money in scams facilitated by the virtual currency kiosks owned by Bitcoin of America.
Based on the reports, about four users fell victim to scams perpetrated by fraudsters using the kiosks. The fraudsters impersonated some top existing companies and banks, luring the victims to deposit some cash into the kiosk.
The scammers seemingly gave clients QR codes to prove their legitimacy, assuring their money was safe. Once the victims deposit the cash, the scammers conduct a conversion transaction that sends cryptocurrency directly to their wallets instead of the clients.
Recent reports indicated that the virtual currency kiosk operator illegally operates in Connecticut without licensing.
The four clients who fell prey to the issue lost tens of thousands through these virtual currency kiosks. In recent reports, the Bitcoin in America network agreed to pay $86K to the investors who lost funds.
Possible new regulation for virtual kiosks in Connecticut
On the other side, the regulators have seemingly claimed that the lack of proper licensing and regulation of the virtual booths is the reason for the scams. The Bitcoin of America was indicted for criminal charges and will immediately seize operations in Connecticut.
The Department of Banking and State Police in Connecticut also proposed bill HB 6752, “An Act Concerning Digital Assets.” The bill allows the Banking Commission some authority in adopting virtual currency regulations.
Furthermore, the new bill requires anyone running a virtual currency kiosk to get a money transmitter license, overseeing them efficiently. ATMs will now put clear disclosures for customers to read and agree on before using the booth.
The Connecticut State Police and the banking department issued an alert with guidelines for investors to avoid falling prey to scams within the kiosks.