Purpose

This bill would ban placing or operating a virtual currency kiosk in Minnesota. It also repeals certain existing statutes and sets out strict consumer protections and disclosure requirements for virtual currency transactions, including a defined process for new versus existing customers and limits on transaction amounts.

Main Provisions

• Prohibition: It is illegal to place or operate a virtual currency kiosk in Minnesota.
• Repeal: It repeals specific sections of Minnesota law (53B.69 and 53B.75) related to virtual currency kiosks.
• Definitions: Establishes terms used in the bill, including:
  • Virtual currency kiosk operator: a licensee that runs a kiosk in Minnesota.
  • Virtual currency kiosk transaction: any transaction conducted online or at a kiosk to buy or sell virtual currency for fiat currency.
  • New customer: a person who has been a customer of a kiosk operator for less than 72 hours.
  • Existing customer: a person who has been a customer for more than 72 hours.
  • The 72-hour rule automatically shifts a new customer to existing status after 72 hours.
• Disclosures and Consumer Protections:
  • Before entering an initial virtual currency transaction, operators must clearly disclose all material risks on-screen and obtain acknowledgment.
  • Disclosures must include at least seven items, such as not legal tender status, lack of government-insured protections, price volatility, potential for total loss, and that some transactions are irreversible.
  • Operators must also provide an additional prominent warning about losses due to fraudulent or accidental transactions being unrecoverable and that transactions are irreversible, plus a notice about scam risks (e.g., scammers impersonating loved ones).
  • Before each transaction, operators must disclose terms and conditions in a clear, readable way, covering items such as the transaction amount, fees, type of transaction, potential for reversal, daily transaction limits, price differences, and other standard disclosures.
• Acknowledgment of Disclosures:
  • Operators must ensure customers acknowledge receipt of all disclosures before completing a transaction.
  • After completing a transaction, operators must provide a receipt (physical or digital) with detailed transaction information, including contact info, transaction type/value/date/time, transaction hash, addresses, fees, exchange rate, liability for nondelivery or delays, refund policy, and any additional required information.
• Refunds for New Customers:
  • Operators must issue a full refund for all transactions made within the 72-hour new-customer period upon request, if the customer was fraudulently induced.
  • To qualify for a refund, the customer must report fraudulent activity within 14 days of the last transaction and involve law enforcement or government authorities.
• Transaction Limits:
  • New customers face a maximum daily transaction limit of $2,000.
  • Existing customers’ daily transaction limits are set by the kiosk operator in compliance with federal law.

Definitions and Scope

• Virtual currency kiosk: physical or online setup where currency can be exchanged for virtual currency or fiat currency.
• Virtual currency kiosk transaction: any transaction conducted, in whole or in part, electronically via a kiosk.
• Material risks: includes volatility, lack of protection, irreversibility, and risk of scams.

Significant Changes to Existing Law

• The bill would repeal certain prior provisions (53B.69 subds. 3b, 3c, 11, 12 and 53B.75) and replace them with a new framework that prohibits kiosks and imposes comprehensive disclosures, risk warnings, consent requirements, refund rights for new customers, and transaction limits.

Practical Impact

• Consumers would face strong protections and clear warnings if any virtual currency kiosk were to operate in Minnesota, but the core effect of the bill is a prohibition on new kiosk operations combined with a detailed consumer-protection regime if any kiosk activity were to occur under allowed circumstances.

Relevant Terms virtual currency kiosk Minnesota prohibition virtual currency fiat currency new customer existing customer 72-hour period transaction daily transaction limit $2,000 disclosures material risks not legal tender not government insured (FDIC/NCUA/SPIC protections) reversible vs irreversible transactions fraudulent or accidental transactions refund receipt transaction hash address exchange rate fees liability for nondelivery or delayed delivery refund policy acknowledgment of disclosures scams impressions of love ones impersonation consent confirmation operator contact information repeal of 53B.69 and 53B.75