Bitcoin of America, an ATM provider, has agreed to halt its operations in Connecticut after failing to obtain the necessary license from the Department of Banking. The consent order came into effect following the loss of tens of thousands of dollars by four Connecticut consumers in a scam involving the unlicensed Bitcoin ATM kiosks operated by Bitcoin of America.
The Department of Banking emphasized the importance of obtaining the appropriate license for operating Bitcoin ATM kiosks in the state. As a result, Bitcoin of America was required to make restitution totaling $86,000 to the affected consumers. In addition, the company is winding down its operations in Connecticut after facing a criminal indictment.
Jorge Perez, the banking commissioner, issued a warning against the use of unlicensed crypto kiosks, noting that investors are often enticed and deceived into depositing cash into these kiosks and transferring an equivalent amount of cryptocurrencies to scammers. Bitcoin of America, as a platform facilitating the transfer of consumers’ funds to third parties, is obligated to hold a money transmitter license. Legislative measures are being pursued to introduce more regulations and consumer protections in Connecticut, including the requirement for digital currency kiosks to obtain licenses as money transmitters.
The Connecticut State Police, Department of Banking, Office of the Attorney General, and the Department of Consumer Protection jointly issued a scam alert cautioning against the use of unlicensed crypto and Bitcoin ATMs.
In a separate incident in Ohio, 52 Bitcoin of America ATMs and kiosks suspected of involvement in scams were confiscated earlier this year. The global geopolitical instability, combined with crackdowns on unlicensed operations, has contributed to a decline in the overall Bitcoin ATM network. In March alone, 3,627 crypto ATMs went offline, marking the largest monthly decline ever recorded for crypto ATMs.