,,ii #aaith ,,congress #ast ,session ,s4 #gaj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #be1 #bjbe,mr4 ,durbin 7for himself1 ,mr4 ,blumenthal1 ,mr4 ,reed1 and ,mr4 ,welch7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to amend title #ca1 ,united ,states ,code1 to prevent fraudulent transactions at virtual currency kiosks1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,crypto ,,atm ,fraud ,prevention ,act of #bjbe4 #b4 ,registration with the ,secretary of the ,treasury ,section #eccj of title #ca1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7d7-- 7,a7 in paragraph 7#a77;,a71 by inserting 1 any person who owns1 operates1 or manages a virtual currency kiosk in the ,united ,states or its territories1 after similar instruments2 and 7,b7 by adding at the end the following3 7#c7 ,virtual currency2 virtual currency address2 virtual currency kiosk2 virtual currency kiosk operator ,the terms virtual currency1 virtual currency address1 virtual currency kiosk1 and virtual currency kiosk operator have the meanings given those terms1 respectively1 in section #eccg4 2 and 7#b7 by adding at the end the following3 7f7 ,registration of virtual currency kiosk locations 7#a7 ,in general ,not later than #ij days after the effective date of this subsection1 and not less than once every #ij days thereafter1 the ,secretary of the ,treasury shall require virtual currency kiosk operators to submit an updated list containing the physical address of each virtual currency kiosk owned or operated by the virtual currency kiosk operator4 7#b7 ,form and manner of registration ,each submission by a virtual currency kiosk operator pursuant to paragraph 7#a7 shall include-- 7,a7 the legal name of the virtual currency kiosk operator2 7,b7 any fictitious or trade name of the virtual currency kiosk operator2 7,c7 the physical address of each virtual currency kiosk owned1 operated1 or managed by the virtual currency kiosk operator that is located in the ,united ,states or the territories of the ,united ,states2 7,d7 the start date of operation of each virtual currency kiosk2 7,e7 the end date of operation of each virtual currency kiosk1 if applicable2 and 7,f7 each virtual currency address used by the virtual currency kiosk operator4 7#c7 ,false and incomplete information ,the filing of false or materially incomplete information in a submission required under paragraph 7#a7 shall be deemed a failure to comply with the requirements of this subsection4 4 #c4 ,preventing fraudulent transactions at virtual currency kiosks 7a7 ,in general ,subchapter ,,ii of ,chapter #ec of ,title #ca1 ,united ,states ,code1 is amended by adding at the end the following3 #eccg4 ,virtual currency kiosk fraud prevention 7a7 ,definitions ,in this section3 7#a7 ,blockchain analytics ,the term blockchain analytics means the analysis of data from blockchains or public distributed ledgers1 and associated transaction information1 to provide risk-specific information about virtual currency transactions and virtual currency addresses4 7#b7 ,customer ,the term customer means any person that purchases or sells virtual currency through a virtual currency kiosk4 7#c7 ,existing customer ,the term existing customer means a customer other than a new customer4 7#d7 ,fin,c,e,n ,the term ,fin,c,e,n means the ,financial ,crimes ,enforcement ,network of the ,department of the ,treasury4 7#e7 ,new customer ,the term new customer1 with respect to a virtual currency kiosk operator1 means a customer during the #ad-;day period beginning on the date of the first virtual currency kiosk transaction of the customer with the virtual currency kiosk operator4 7#f7 ,transaction hash ,the term transaction hash means a unique identifier made up of a string of characters that act as a record of and provide proof that a transaction was verified and added to the blockchain4 7#g7 ,virtual currency ,the term virtual currency means any digital representation of value that is recorded on a cryptographically secured distributed ledger or any similar technology or another implementation1 which was designed and built as part of a system to leverage or replace blockchain1 distributed ledger technology1 or their derivatives4 7#h7 ,virtual currency address ,the term virtual currency address means an alphanumeric identifier associated with a virtual currency wallet identifying the location to which virtual currency purchased through a virtual currency kiosk can be sent or from which virtual currency sold through a virtual currency kiosk can be accessed4 7#i7 ,virtual currency kiosk ,the term virtual currency kiosk means a stand-alone machine that is capable of accepting or dispensing legal tender in exchange for virtual currency4 7#aj7 ,virtual currency kiosk operator ,the term virtual currency kiosk operator means a person who owns1 operates1 or manages a virtual currency kiosk located in the ,united ,states or its territories4 7#aa7 ,virtual currency kiosk transaction ,the term virtual currency kiosk transaction means the purchase or sale of virtual currency via a virtual currency kiosk4 7#ab7 ,virtual currency wallet ,the term virtual currency wallet means a software application or other mechanism providing a means for holding1 storing1 and transferring virtual currency4 7b7 ,disclosures ,before entering into a virtual currency transaction with a customer1 a virtual currency kiosk operator shall disclose in a clear1 conspicuous1 and easily readable manner-- 7#a7 all relevant terms and conditions of the virtual currency kiosk transaction1 including-- 7,a7 the amount of the virtual currency kiosk transaction2 7,b7 the type and nature of the virtual currency kiosk transaction2 7,c7 a warning that the virtual currency kiosk transaction is final1 is not refundable1 and may not be reversed2 and 7,d7 the type and amount of any fees or other expenses paid by the customer2 7#b7 a warning relating to consumer fraud including-- 7,a7 a warning that consumer fraud often starts with contact from a stranger1 and that the customer should never send money to someone they do not know2 7,b7 a warning about the most common types of fraudulent schemes involving virtual currency kiosks1 such as-- 7i7 impersonation of a government official or a bank representative2 7ii7 threats of jail time or financial penalties2 7iii7 offers of a job or reward in exchange for payment1 or offers of deals that seem too good to be true2 7iv7 claims of a frozen bank account or credit card2 or 7v7 requests for donations to charity or disaster relief2 and 7,c7 a statement that the customer should contact the virtual currency kiosk operator's customer service helpline or ,state or local law enforcement if they suspect fraudulent activity4 7c7 ,acknowledgment of disclosures ,each time a customer uses a virtual currency kiosk1 the virtual currency kiosk operator shall ensure acknowledgment of all disclosures required under subsection 7b7 via confirmation of consent of the customer at the virtual currency kiosk4 7d7 ,receipts ,upon completion of each virtual currency kiosk transaction1 the virtual currency kiosk operator shall provide the customer with a receipt1 which shall include the following information3 7#a7 ,the name and contact information of the virtual currency kiosk operator1 including a telephone number for a customer service helpline4 7#b7 ,the name of the customer4 7#c7 ,the type1 value1 date1 and precise time of the virtual currency kiosk transaction1 transaction hash1 and each applicable virtual currency address4 7#d7 ,the amount of the virtual currency kiosk transaction expressed in ,united ,states dollars4 7#e7 ,all fees charged4 7#f7 ,a statement that the customer may be entitled by law to a refund if the customer reports fraudulent activity in conjunction with the virtual currency kiosk transaction not later than #cj days after the date of the virtual currency kiosk transaction4 7#g7 ,the refund policy of the virtual currency kiosk operator or a ,uniform ,resource ,locator where the refund policy of the virtual currency kiosk operator can be found4 7#h7 ,a statement that the customer should contact law enforcement if they suspect fraudulent activity1 such as scams1 including contact information for a relevant law enforcement or government agency4 7#i7 ,any additional information the virtual currency kiosk operator determines appropriate4 7e7 ,physical receipts required ,not later than #a year after the effective date of this section1 each receipt required under subsection 7d7 shall be issued to the customer as a physical receipt at the virtual currency kiosk at the time of the virtual currency kiosk transaction1 but such receipt may also be provided in additional forms or communications4 7f7 ,anti-,fraud policy 7#a7 ,in general ,each virtual currency kiosk operator shall take reasonable steps to detect and prevent fraud1 including establishing and maintaining a written anti-fraud policy that includes-- 7,a7 the identification and assessment of fraud-related risk areas2 7,b7 procedures and controls to protect against risks identified under subparagraph 7,a72 7,c7 allocation of responsibility for monitoring the risks identified under subparagraph 7,a72 and 7,d7 procedures for the periodic evaluation and revision of the anti-fraud procedures1 controls1 and monitoring mechanisms under subparagraphs 7,b7 and 7,c74 7#b7 ,submission of anti-fraud policy to ,fin,c,e,n ,each virtual currency kiosk operator shall submit to ,fin,c,e,n the anti-fraud policy required under paragraph 7#a7 not later than #ij days after the later of-- 7,a7 the effective date of this section2 or 7,b7 the date on which the virtual currency kiosk operator begins operating4 7g7 ,appointment of compliance officer ,each virtual currency kiosk operator shall designate and employ a compliance officer who-- 7#a7 is qualified to coordinate and monitor compliance with this section and all other applicable ,federal and ,state laws1 rules1 and regulations2 7#b7 is employed full-time by the virtual currency kiosk operator2 7#c7 is not the chief executive officer of the virtual currency kiosk operator2 and 7#d7 does not own or control more than #bj percent of any interest in the virtual currency kiosk operator4 7h7 ,use of blockchain analytics 7#a7 ,in general ,each virtual currency kiosk operator shall use blockchain analytics to prevent sending virtual currency to a virtual currency wallet known to be affiliated with fraudulent activity at the time of a virtual currency kiosk transaction and to detect transaction patterns indicative of fraud or other illicit activities4 7#b7 ,compliance ,the ,director of ,fin,c,e,n may request evidence from any virtual currency kiosk operator to confirm compliance with this subsection4 7i7 ,verbal confirmation required before new customer transactions 7#a7 ,in general ,before entering into a virtual currency kiosk transaction valued at #ejj dollars or more with a new customer1 a virtual currency kiosk operator shall obtain verbal confirmation from the new customer that-- 7,a7 the new customer wishes to proceed with the virtual currency kiosk transaction2 7,b7 the new customer understands the nature of the virtual currency kiosk transaction2 and 7,c7 the new customer is not being fraudulently induced to engage in the transaction4 7#b7 ,reasonable effort ,a virtual currency kiosk operator shall make a reasonable effort to determine whether the customer is being fraudulently induced to engage in the virtual currency kiosk transaction4 7#c7 ,method of confirmation ,each verbal confirmation required under paragraph 7#a7 shall be given by way of a live telephone or video call to a person employed by1 or on behalf of1 the virtual currency kiosk operator4 7j7 ,refunds 7#a7 ,in general 7,a7 ,new customers ,not later than #cj days after receiving an application under paragraph 7#b71 a virtual currency kiosk operator shall issue a refund to a customer for the full amount of each virtual currency kiosk transaction1 including the dollar value of virtual currency exchanged and all transaction fees1 made during the period in which the customer was a new customer and for which the customer was fraudulently induced to engage in the virtual currency kiosk transaction4 7,b7 ,existing customers ,not later than #cj days after receiving an application under paragraph 7#b71 a virtual currency kiosk operator shall issue a refund to a customer for the full amount of all transaction fees associated with each virtual currency kiosk transaction made during the period in which the customer was an existing customer and for which the customer was fraudulently induced to engage in the virtual currency kiosk transaction4 7#b7 ,application ,a customer seeking a refund under paragraph 7#a7 shall1 not later than #cj days after the date of the virtual currency kiosk transaction1 submit an application to the virtual currency kiosk operator that includes the following3 7,a7 ,the name1 address1 and phone number of the customer4 7,b7 ,the transaction hash of the virtual currency kiosk transaction or information sufficient to determine the type1 value1 date1 and time of the virtual currency kiosk transaction4 7,c7 ,a copy of a report to a ,state or local law enforcement or government agency1 made not later than #cj days after the virtual currency kiosk transaction1 that includes a sworn affidavit attesting that the customer was fraudulently induced to engage in the virtual currency kiosk transaction4 7#c7 ,enhanced damages ,any person who willfully denies a refund to a customer in violation of paragraph 7#a7 shall be liable to the customer for #c times the amount of the refund owed under that paragraph or #aj1jjj1 whichever is greater4 ,a penalty under this paragraph shall be in addition to any penalty under subsection 7n74 7k7 ,transaction limits with respect to new customers 7#a7 ,in a #bd-;hour period ,a virtual currency kiosk operator shall not accept more than #b1jjj1 or the equivalent amount in virtual currency1 from any new customer during any #bd-;hour period4 7#b7 ,total ,a virtual currency kiosk operator shall not accept a total of more than #aj1jjj1 or the equivalent amount in virtual currency1 from any new customer4 7l7 ,customer service helpline ,each virtual currency kiosk operator shall provide live customer service during all hours that the virtual currency kiosk operator accepts virtual currency kiosk transactions1 the phone number for which is regularly monitored and displayed in a clear1 conspicuous1 and easily readable manner upon each virtual currency kiosk4 7m7 ,communications with law enforcement 7#a7 ,in general ,each virtual currency kiosk operator shall provide a dedicated and frequently monitored phone number and email address for relevant law enforcement and government agencies to facilitate communication with the virtual currency kiosk operator in the event of reported or suspected fraudulent activity4 7#b7 ,submission ,not later than #ij days after the effective date of this section1 each virtual currency kiosk operator shall submit the phone number and email address described in paragraph 7#a7 to ,fin,c,e,n and all other relevant law enforcement and government agencies4 7n7 ,civil penalties 7#a7 ,in general ,any person who fails to comply with any requirement of this section1 or any regulation prescribed under this section1 shall be liable to the ,united ,states for a civil monetary penalty of #aj1jjj for each such violation4 7#b7 ,continuing violation ,each day that a violation described in paragraph 7#a7 continues shall constitute a separate violation for purposes of such paragraph4 7#c7 ,assessments ,any penalty imposed under this section shall be assessed and collected by the ,secretary of the ,treasury as provided in section #ecba and any such assessment shall be subject to the provisions of that section4 7o7 ,relationship to ,state laws ,the provisions of this section shall preempt any ,state law1 rule1 or regulation only to the extent that such ,state law1 rule1 or regulation conflicts with a provision of this section4 ,nothing in this section shall be construed to prohibit a ,state from enacting a law1 rule1 or regulation that provides greater protection to customers than the protection provided by the provisions of this section4 4 7b7 ,clerical amendment ,the table of sections for chapter #ec of title #ca1 ,united ,states ,code1 is amended by inserting after the item relating to section #eccf the following3 #eccg4 ,virtual currency kiosk fraud prevention4 4 #d4 ,effective date ,the amendments made by this ,act shall take effect #ij days after the date of enactment of this ,act4