Virtual currency kiosks would face licensing, disclosures, and transaction limits

Virtual currency kiosk operators would have to apply for a money transmission license. This covers people who own, operate, market, manage, or facilitate a virtual currency kiosk in West Virginia. Applicants would have to provide kiosk delegate locations through the Nationwide Multistate Licensing System and pay the required fee. Kiosks would operate as authorized delegates of a licensed money transmitter. An operator already doing business in West Virginia would have 90 days after the amendments take effect to apply for a license.

Licensees would have to give customers risk and transaction information, provide receipts, follow daily limits, and refund certain reported fraudulent transactions. The rules cover new and existing customers using virtual currency kiosks, with new customers subject to separate account-opening and transaction limits. Before an initial transaction, customers would receive clear warnings about fraud, losses, insurance, price changes, and possible irreversibility. Before each transaction, licensees would disclose the amount, fees, exchange rate, transaction type, possible limits, and other required terms. The maximum daily limit would be $1,000 for a new customer and $10,000 for an existing customer. A new customer could request a full refund for fraud occurring during the first 10 days after registration only if the customer contacts the licensee and a government or law enforcement agency and files a report within 30 days after the last transaction. The disclosure and receipt rules would apply before and upon each covered transaction; the fraud-refund window would cover transactions no later than 10 days after registration.

Licensees would have to verify customers, monitor transactions, support law enforcement, and use fraud-prevention controls. These duties would apply to licensees operating or supervising virtual currency kiosks and to the customer wallets used at those kiosks. Licensees would have to collect government identification, prevent one wallet from being used by multiple customers, and block designated high-risk or sanctioned wallets. They would have to provide live toll-free support, appoint a law-enforcement contact, employ a qualified chief compliance officer, and use full-time compliance employees. Enhanced checks could require a temporary transaction hold of up to 72 hours when the licensee identifies elevated risk. These duties would apply while a licensee operates virtual currency kiosks and handles covered customer transactions.