Alaska crypto kiosks would cap payments and require fraud refunds

Operators would hold first transactions and refund cancellations during the hold or fraud claims that meet reporting and documentation rules. The hold would apply to users who have never dealt with that operator. Operators could not conduct another transaction with them during the hold. Users would need to report fraud within 90 days after the last transaction or learning of the fraud, whichever is later. Within 120 days after contacting the operator, users would need to submit a police report, a state regulator's report, or a sworn statement describing the fraud. Refunds would include all transaction charges and use the currency originally paid, regardless of any earlier acknowledgment by the user. Operators would issue refunds within 72 hours after receiving the required fraud documentation or a cancellation request made during the first-transaction hold.

Operators would cap each user's payments and transaction fees. Payment limits would cover all products the operator offers. Online purchases and over-the-counter platforms could not be used to bypass them. The payment caps would also apply to equivalent amounts in cryptocurrency. The fee cap would be based on the transaction's value in U.S. dollars or its cryptocurrency equivalent.

Operators would check users' identities and use written policies and cryptocurrency tracking software to detect and prevent fraud. Tracking software would help detect suspicious payment patterns and wallets known or likely to be linked to fraud. Before accepting payment, operators or their authorized representatives would copy government-issued identification and collect the user's name, birth date, phone number, address, and email address. Users could transact only under their own true identity. Operators would be responsible for identity-rule violations even without proof of fault. Operators would maintain policies against fraud and money laundering and follow federal Bank Secrecy Act requirements.

Operators would explain costs and risks, provide customer help, and supply scam-awareness materials to kiosk locations. Disclosures would explain costs, cryptocurrency risks, and fraud-reporting contacts. Kiosks would display scam warnings and customer-service contact information. Users would receive clear disclosures in their chosen language and acknowledge receiving them. Operators would provide paper and electronic receipts. Written notices would be in English and Spanish. Operators would communicate in each user's preferred language through staff, interpreters, or communication aids. Operators could not stop staff at kiosk locations from educating users about scams. Live customer service would cover operating hours, including 8 a.m. through 10 p.m. Alaska time. State-approved staff training materials would be provided annually.

Operators would need a money-transfer license and prior state approval for kiosk locations, report their activities, and assist fraud investigations. These duties would cover businesses operating, owning, managing, or providing services for cryptocurrency kiosks in Alaska. Operators would provide requested user and transaction information to state regulators, including denied transactions. Investigating agencies could request tracing results and help tracking cryptocurrency transfers. Reported data would be confidential. State regulators would publish an annual summary, and combined data could be released publicly. Violations would count as unfair or deceptive business practices. Possible penalties would include civil penalties, kiosk seizure, and loss of all Alaska customer fees collected during unlicensed activity or noncompliance. Local governments could keep stronger protections that do not directly conflict with these rules. Location reports would be due within 45 days after each calendar quarter. Annual business reports would be due on or before March 31 for the previous calendar year.