BILL NUMBER: S9891
SPONSOR: SANDERS
 
TITLE OF BILL:
An act to amend the banking law, in relation to crypto kiosks
 
PURPOSE OR GENERAL IDEA OF THE BILL:
The purpose of this bill is to establish oversight and safeguards to
prevent scammers from using Crypto Kiosks to commit fraud and cause
financial harm. The bill also requires that all Crypto Kiosk machines
display a warning that advises the user to terminate transactions if
they are being directed by unidentified or suspicious parties.
 
SUMMARY OF PROVISIONS:
Section one amends the banking law by adding a new Article 2-AAA titled
"Crypto Kiosks".
Section 76-a: Definitions
Section 76-b: Crypto kiosk and cashier crypto exchange registration.
Requires that every operator of a Crypto Kiosk or cashier crypto
exchange to be registered with the department based on the form
prescribed by the department and display their registration numbers.
Section 76-c: Disclosures for crypto kiosks. Requires that all terms and
conditions associated with crypto kiosks are displayed in the chosen
language of the user.
Section 76-d: Disclosure required prior to completing transaction.
Requires the display of a warning label advising the termination of a
transaction if directed by an unidentified or suspicious party along
with the information of the owner of the crypto kiosk.
Section 76-e: Transaction Receipt. Requires that the crypto kiosk
provide a paper and electronic receipt of the transaction with the
information of the operator and law enforcement in case of fraud, as
well as all transaction logistics.
Section 76-f: Customer Service. Requires all crypto kiosks performing
businesses to provide a live customer service agent.
Section 76-g: Transaction hold periods. Requires the implementation of
transaction hold periods and full refunds if the crypto kiosk operator
does not comply by anti-fraud provisions.
Section 76-h: Fraud refunds related to crypto kiosks. Requires that
refunds be issued to users if they are involved in a case of fraud.
Section 76-i: Cashier crypto transmission commission. Limits cashier
crypto exchanges to currency-to-cash conversions only,
Section 76-j: Crypto kiosk or cashier crypto fees. Limits all fees and
charges associated with one transaction to be under three percent of the
value of the United States Dollar.
Section 76-k: Fraud and anti-money laundering. Directs all crypto kiosk
operators to have anti money-laundering and fraud policies in accordance
with the Bank Secrecy Act.
Section 76-1: Blockchain analytics. Mandates the use of blockchain
analytics to identify illicit activity and a communication portal
between operators and law enforcement in a case of reported financial
crimes.
Section 76-m: Transaction limits and protection. Establishes a daily and
monthly transaction limit along with prohibiting the use of alterna-
tives.
Section 76-n: Legal and beneficial ownership. Establishes a strict
liability for non-compliance to the sections of this article.
Section two establishes a severability clause. Section three establishes
the effective date.
 
JUSTIFICATION:
According to the AARP, in 2025 alone, Crypto Kiosk-related scams
resulted in a loss of $333 million. According to the FBI, 860 of people
targeted with these scams were 60 years and older. Studies show that the
elderly are generally more vulnerable to scams such as these due to
various factors such as a lack of understanding of cryptocurrency as
well as larger monetary savings secured over a longer lifetime.
Scammers will prey on our state's most vulnerable populations and use a
variety of methods to execute their scams. Such scams include pretending
to be law enforcement, persons who kidnapped their relatives, bail
bondsmen, courts or ransom. There must be guardrails to prevent scams
against the elderly, and New Yorkers in general, so that our vulnerable
populations are not targeted and do not fall victims to these scams.
 
PRIOR LEGISLATIVE HISTORY:
None.
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT:
N/a
 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.