South Dakota law sets safety and refund rules for virtual currency kiosks

Kiosk operators give users receipts and clear risk disclosures for each transaction. These rules cover each virtual currency transaction at a licensee's kiosk. The disclosure must be in the user's chosen language and explain transaction risks, fees, and how to contact the operator. It must warn users to stop and report a transaction if someone they do not personally know asks them to deposit money. Operators provide the receipt and disclosure for each transaction.

Operators refund qualifying fraud victims and limit user transactions and charges. Refunds cover users defrauded through a kiosk operated by the licensee. Transaction limits apply to products and services offered through the licensee's kiosk. A user must report all affected transactions within 90 days after the last fraud occurrence or becoming aware of the fraud. Within 120 days after contacting the operator, the user must submit a police or government report, or a sworn statement describing known fraud. The operator must refund the full amount, including charges, within 72 hours after the user meets all conditions. Operators set daily and 30-day transaction limits of no more than $1,000 and $10,000 per user. Related products and services cannot be used to get around those limits. Charges for one transaction cannot exceed 25% of its amount. Operators must issue the refund within 72 hours after the user meets all conditions. Transaction limits apply per user per day and per 30-day period.

Operators report kiosk activity and complaints, provide customer help, and assist fraud investigations. These duties apply to licensees that operate virtual currency kiosks in South Dakota. Renewal reports include kiosk activity and revenue, complaints and outcomes, refund requests and results, compliance contact details, locations, and suspicious activity reports. Reports of condition include kiosk locations and operating dates, related identifiers, and transactions declined for suspected fraud. Operators provide live customer service from 8 a.m. to 10 p.m. local time and display a toll-free number. They also maintain a frequently monitored phone line or email for law enforcement and regulators, and provide relevant findings and assistance upon request. Operators include the required information in renewal reports and reports of condition. Live customer service is available at least from 8 a.m. to 10 p.m. local time.

Operators check users' identities and take steps to detect and block fraud. These duties apply to licensees and their virtual currency kiosks; identity checks cover each kiosk transaction. Before accepting payment, operators collect a copy of government-issued ID and specified personal details. A user cannot transact under another person's name, account, or identity. Operators maintain a written policy to detect and prevent fraud and money laundering. Software must block transactions to destination addresses reasonably likely or known to be linked to fraud and block addresses tied to overseas platforms that do not allow U.S. users. Operators verify identity before accepting payment and apply the software checks when a transaction is made.