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Bitcoin of America Faces Scrutiny in Connecticut for Unlicensed Operations

Key Takeaways
  • Bitcoin of America operated without a license in Connecticut, resulting in a consent order and $86,000 in restitution to affected consumers
  • Connecticut's banking commissioner warned against using unlicensed crypto kiosks and called for legislation to regulate digital currency kiosks and protect consumers
  • Agencies issued a scam alert in Connecticut, while globally, Bitcoin ATM installations declined due to regulations and instability
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Bitcoin ATM Provider Faces Scrutiny in Connecticut Over Licensing and Scam Concerns

Bitcoin of America, a cryptocurrency and Bitcoin ATM provider, is in trouble in Connecticut. They were operating without the proper license required by the state's Department of Banking. This caused problems when some customers got scammed using their Bitcoin ATM kiosks and lost a lot of money. To make things right, Bitcoin of America has agreed to pay $86,000 to the affected customers.

Because of this incident, they have decided to shut down their operations in Connecticut. The state's banking commissioner, Jorge Perez, warned people about using unlicensed crypto kiosks. He said scammers trick people into depositing cash into these kiosks and transferring cryptocurrencies, resulting in big financial losses.

To prevent such scams in the future, new regulations and consumer protections are being proposed in the state legislature. These rules would require digital currency kiosks, like the ones operated by Bitcoin of America, to get licenses as money transmitters.

The Connecticut State Police, Department of Banking, Office of the Attorney General, and the Department of Consumer Protection have issued a warning to the public to stay away from unlicensed crypto and Bitcoin ATMs. They are working together to fight fraud in the cryptocurrency world and protect people from scams.

This incident is not limited to Connecticut. In Ohio, 52 Bitcoin of America ATMs and kiosks suspected of being involved in scams were seized in March. Furthermore, due to global instability and crackdowns on unlicensed operations, the number of Bitcoin ATMs has been declining. In fact, from September 2022 to March 2023, there has been a significant decrease in new installations, with March seeing the biggest monthly decline of 3,627 crypto ATMs. 

Also read - Crypto Outflows Continue for 5th Week on Weak BTC Sentiment: CoinShares

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