Cryptocurrency kiosk ban heads to House Floor as part of commerce package

A prohibition on virtual currency kiosks in Minnesota is on its way to the House Floor.

It’s included in HF4188 that, as amended, is the omnibus commerce policy bill approved by the House Commerce Finance and Policy Committee Wednesday.

The ban calls for all virtual currency kiosks to be removed from the state by the end of the year. Additionally, any operator that conducts transactions only through a kiosk must pay out any virtual currency held for or owed to a customer by year’s end.

The ban comes at the request of law enforcement in Minnesota, who testified in February about the higher number of scam cases reported involving the kiosks. However, virtual currency kiosk operators oppose the ban, saying it’ll prevent them from operating in the state when they’re not the ones conducting the scams.

Kiosks look like ATMs but allow people to use cash or a debit card to purchase cryptocurrency. In scams, the cryptocurrency goes into a digital wallet controlled by the scammer. The ban would only affect physical kiosks and people could still conduct cryptocurrency transactions online.

Additionally, the omnibus commerce policy bill would:

• set standards for transfers of mortgage servicing or ownership;
• amend student loan standards, including the transfer of a student loan between servicers;
• require insurance lead generators to keep records;
• allow entities to be licensed as a scrap metal dealer;
• codify requirements related to Regulation Crowdfunding; and
• amend unclaimed property statutes to define when prepayment of funeral expenses and virtual currency is considered abandoned.

The bill largely contains the Department of Commerce’s policy proposals, as well as all or part of HF3642, HF4071 and HF4120. Each is sponsored by Rep. Erin Koegel (DFL-Spring Lake Park).