Plesa bill requiring risk warnings at crypto ATMs

The text as introduced · 1,418 words

89R6461 SCR-F

By: Plesa
H.B. No. 2798

A BILL TO BE ENTITLED

AN ACT

relating to disclosures and other requirements concerning virtual

currency kiosk transactions; authorizing a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle E, Title 3, Finance Code, is amended by

adding Chapter 161 to read as follows:

CHAPTER 161. VIRTUAL CURRENCY KIOSKS

Sec. 161.001. DEFINITIONS. In this chapter:

(1) "Digital asset service provider" has the meaning

assigned by Section 160.001.

(2) "Transaction hash" means a unique identifier

consisting of a string of characters that act as a record of a

transaction and provide proof that the transaction was verified and

added to the blockchain.

(3) "Virtual currency" has the meaning assigned by

Section 12.001, Business & Commerce Code.

(4) "Virtual currency kiosk" means an electronic

terminal operated by a virtual currency kiosk operator in this

state to enable the operator to facilitate the exchange of virtual

currency for money, bank credit, or other virtual currency,

including by:

(A) connecting directly to a separate virtual

currency exchanger that performs the actual virtual currency

transmission; or

(B) drawing on the virtual currency in the

possession of the electronic terminal's operator.

(5) "Virtual currency kiosk operator" or "operator"

means a person, including a digital asset service provider, that

operates a virtual currency kiosk.

(6) "Virtual currency kiosk transaction" means a

transaction conducted or performed, wholly or partly, by electronic

means using a virtual currency kiosk. The term includes a

transaction made at a virtual currency kiosk to purchase currency

with fiat currency or to sell virtual currency for fiat currency.

Sec. 161.002. APPLICABILITY. This chapter applies to a

virtual currency kiosk operator that operates a virtual currency

kiosk in this state.

Sec. 161.003. DISCLOSURES ON MATERIAL RISKS. (a) Before

entering into an initial virtual currency kiosk transaction for, on

behalf of, or with a customer and subject to Subsection (c), a

virtual currency kiosk operator shall clearly and conspicuously

disclose, in plain, easy to read language, at least the following

material risks generally associated with virtual currency:

(1) virtual currency is not legal tender and is not

backed or insured by the government;

(2) accounts and value balances of virtual currency

are not subject to Federal Deposit Insurance Corporation, National

Credit Union Administration, or Securities Investor Protection

Corporation protections;

(3) some virtual currency transactions are considered

to be made only when recorded on a public ledger, which may not be

the date or time when the transaction is initiated;

(4) a virtual currency's value may be derived from the

continued willingness of market participants to exchange fiat

currency for the virtual currency, which may result in the

permanent and total loss of the virtual currency's value if the

market for that virtual currency disappears;

(5) a customer who accepts a virtual currency as

payment at the time of the transaction is not required to accept the

currency as payment and may decline to accept the currency as

payment in a future transaction;

(6) the volatility and unpredictability of the price

of virtual currency relative to fiat currency may result in a

significant loss in value over a short period;

(7) the nature of virtual currency means that any

technological difficulties experienced by a virtual currency kiosk

operator may prevent access to or use of their customers' virtual

currency; and

(8) any bond maintained by the virtual currency kiosk

operator for the benefit of the operator's customers may not cover

all of the losses incurred by those customers.

(b) In addition to the disclosures under Subsection (a), a

virtual currency kiosk operator shall provide a written disclosure

that:

(1) is prominently displayed and in bold type;

(2) must be acknowledged by the customer;

(3) is provided separately from the disclosures under

Subsection (a); and

(4) states:

"WARNING: LOSSES DUE TO FRAUDULENT OR ACCIDENTAL

TRANSACTIONS ARE NOT RECOVERABLE AND TRANSACTIONS IN VIRTUAL

CURRENCY ARE IRREVERSIBLE. VIRTUAL CURRENCY TRANSACTIONS MAY BE

USED BY SCAMMERS IMPERSONATING LOVED ONES, THREATENING JAIL TIME,

OR INSISTING YOU WITHDRAW MONEY FROM YOUR BANK ACCOUNT TO PURCHASE

VIRTUAL CURRENCY."

(c) The disclosures under Subsection (a) must be displayed

on the screen of the virtual currency kiosk with the ability for a

customer to acknowledge the receipt of the disclosures.

Sec. 161.004. TRANSACTION-RELATED DISCLOSURES. (a) A

virtual currency kiosk operator shall disclose all relevant terms

generally associated with virtual currency and with the products,

services, and activities of the operator, including:

(1) the customer's liability for unauthorized virtual

currency transactions;

(2) the customer's right to:

(A) stop payment of a virtual currency transfer

and the procedure to stop payment;

(B) receive a receipt, trade ticket, or other

evidence of a transaction at the time of the transaction; and

(C) receive prior notice of a change in the

operator's rules or policies;

(3) the circumstances under which the operator,

without a court or government order, is authorized to disclose a

customer's account information to third parties; and

(4) other disclosures customarily provided in

connection with the opening of a customer's account.

(b) Before a virtual currency transaction is entered into

for, on behalf of, or with a customer, a virtual currency kiosk

operator shall clearly and conspicuously disclose the terms of the

transaction. The disclosure must:

(1) be in plain, easy to read language; and

(2) address at least:

(A) the amount of the transaction;

(B) any transaction fees, expenses, or charges,

including applicable exchange rates;

(C) the type and nature of the transaction;

(D) a warning that once a transaction is

completed, the transaction may not be reversed;

(E) the daily virtual currency kiosk transaction

limit for new customers prescribed by Section 161.008;

(F) the difference in the virtual currency's sale

price compared to the current market price; and

(G) any other disclosures customarily provided

in connection with a virtual currency kiosk transaction.

Sec. 161.005. ACKNOWLEDGEMENT OF DISCLOSURES. Before

completing a transaction, a virtual currency kiosk operator shall

ensure that each customer who engages in a virtual currency kiosk

transaction using the operator's kiosk acknowledges receipt of the

disclosures required under Sections 161.003 and 161.004 by

obtaining confirmation of consent.

Sec. 161.006. RECEIPT REQUIRED. After a transaction is

completed, the virtual currency kiosk operator shall provide the

customer with a physical receipt, or an electronic receipt sent by

e-mail or text message, that contains:

(1) the operator's name and contact information,

including a telephone number to answer questions and register

complaints;

(2) the type, value, date, and precise time of the

transaction, the transaction hash, and each virtual currency

address;

(3) the fees charged;

(4) the exchange rate;

(5) a statement of the operator's liability for

nondelivery or delayed delivery;

(6) a statement of the operator's refund policy; and

(7) any additional information the banking

commissioner of Texas may require.

Sec. 161.007. REFUNDS FOR NEW CUSTOMERS. (a) For purposes

of this section, a person is considered to be a new customer if less

than 72 hours has elapsed from the time the person first signed up

as a customer.

(b) The operator of a virtual currency kiosk shall issue to

a new customer, on request, a refund for the total amount of all

virtual currency kiosk transactions made by the customer at the

kiosk during the new customer period described by Subsection (a) if

the customer:

(1) was fraudulently induced to enter into a virtual

currency kiosk transaction; and

(2) not later than the 14th day after the date on which

the last virtual currency kiosk transaction was made during that

72-hour period, contacts the operator and an applicable

governmental or law enforcement agency to inform them of the

fraudulent nature of the transaction.

Sec. 161.008. DAILY TRANSACTION LIMIT. (a) For purposes of

this section, "new customer" means a person described by Section

161.007(a).

(b) A maximum daily transaction limit of $2,000 is

established for each new customer of a virtual currency kiosk

located in this state.

Sec. 161.009. ADMINISTRATION OF CHAPTER; FEES. (a) The

Texas Department of Banking shall administer and enforce this

chapter. The banking commissioner of Texas may charge a virtual

currency kiosk operator a reasonable fee to cover the costs of

implementing this chapter.

(b) The banking commissioner may investigate a virtual

currency kiosk operator to determine compliance with this chapter

in the same manner as allowed under Subchapter B, Chapter 152,

including examination of the records of the operator.

Sec. 161.010. RULES. The Finance Commission of Texas may

adopt rules necessary to administer and enforce this chapter.

SECTION 2. This Act takes effect September 1, 2025.