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Bitcoin of America Ceases Unlicensed Operations In Connecticut, Pays Restitution Fee

BlockNews Team by BlockNews Team
May 24, 2023
in Business, Crypto, Finance, Media
Reading Time: 3 mins read
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  • The BOA failed to acquire a license to operate as a transmitter.
  • The BTC ATM provider has been running virtual currency kiosks in Connecticut.
  • Bitcoin of America will pay a restitution fee of $86,000 to its scammed customers.

The Bitcoin of America branch in Connecticut, U.S., has been ordered to cease its unlicensed activities within the state due to its failure to apply for a proper license and register as a transmitter for the nature of its business.

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Connecticut’s state government published a press release on May 22, announcing that the cryptocurrency and Bitcoin ATM provider had settled with the Department of Banking via a consent order and would be paying a sum of $86,000 to customers who were scammed due to patronizing the BOA’s unlicensed kiosks.

Bitcoin of America had been operating virtual currency kiosks in the state without applying for a proper license; the kiosks enabled clients to purchase virtual currencies such as Bitcoin (BTC) with cash.

According to the press release, four BOA users in Connecticut had lost tens of thousands of dollars to scams, and in line with the consent order, the crypto firm would pay these four victims an $86,000 restitution fee.

The Banking Commissioner, Jorge Perez, advised against using unlicensed crypto kiosks. He mentioned that cybercriminals preyed upon people’s weaknesses and led them to deposit cash into crypto kiosks.

“The Department is taking steps to ensure that the operators and owners of these kiosks are properly licensed and adhere to the regulations,” he said.

The Connecticut state government stated that due to the nature of BOA—which involved sending users’ funds to third parties—the company was expected to register as a money transmitter. The four Connecticut users fell victim to the scammers’ tricks because they believed they represented official businesses.

They were then instructed to deposit cash into the virtual currency kiosks with a QR code provided by the scammer. The victims had no idea they were purchasing virtual currency, which the scammers were receiving.

 To curb this nefarious act from spreading, the Connecticut State Police and the Department of Banking have issued a bill named ‘HB 6752, An Act Concerning Digital Assets’, which focuses on permitting the Banking Commissioner to enforce laws regarding all digital assets.

To further aid the users of crypto kiosks, the Department of Banking, in collaboration with the Connecticut State Police, the Department of Consumer Protection, and the Office of the Attorney General, has issued helpful tips advising users on how to avoid scams involving virtual currency kiosks or Bitcoin ATMs.

Conclusion

Four Connecticut users who were scammed of thousands of dollars have resulted in the halting of unlicensed activities by Bitcoin of America and the payment of $86,000 to these victims. The crypto company was accused of being a conduit through which scammers could steal from unsuspecting customers.

Tags: Bitcoin of AmericaBusinessConnecticutCrypto ATM
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