Photo Credit To Connection Japan Via Flickr
Nevada regulators have changed their stance on crypto kiosks operating in the state. They will now be required to get a money transmission license to continue operating in the state. This change was abrupt and there was no warning. Visionary Financial had recently talked about how Crypto ATM’s have the chance to fuel mass adoption levels. The industry will have to face some unexpected regulatory initiatives in order to move forward.
Proposed Crypto Bill Failed to Pass
During the legislative session that closed in May, Nevada did not pass a proposed crypto regulation bill. However, the regulator in Nevada has decided to go ahead and redefine what it considers a money transmitter in the state. As a result, crypto kiosks now fall within the definition of a money transmitter. This means that money transmitters will need to acquire a surety bond to continue operating in the state.
A surety bond for each crypto kiosk will be set at $5,000. The surety bond is deposited with the state. It acts as insurance for customers in case a business fails. A person familiar with the issue said they first spoke to the state’s regulator on behalf of a customer that was caught in the red tape. However, the state regulator went for months without responding.
During follow up questions, the regulator said they were waiting for the crypto regulation bill to pass before they could act. Review of the issue had started a year ago. When the bill failed to pass, the regulator decided to re-interpret the current statutes that govern money transmission inside the state. A few months ago, a crypto bill to regulate the industry failed to pass. The regulators argued that the bill was too flawed and it would hamper and not help the industry.
Under the regulator’s new interpretation, any transfer of credit, virtual money, value-money, or others, will be regulated under the money transmission license. Proprietors and businesses will have to apply for the license. Before they get approval, they will have to complete a checklist. In this list, a surety bond is included. A $10,000 bond is paid upfront and a $5,000 bond is pad for each crypto kiosk. The maximum limit for the bond requirements is $250,000.
All requirements have been posted publicly on the state’s site. However, the regulator has no plans to issue a press release later to clarify the issue. However, they will get in touch with businesses that have contacted them in the past year or so.
According to an official from the regulatory body, they have no plans to hunt down and penalize kiosks that do not comply with the regulation. However, if they will not have adhered to the new rules after six months, they will start getting notices from the regulator.
Crypto ATMs in Nevada
It is estimated that there are about 109 crypto kiosks in Nevada. Most of these ATMs are located in Las Vegas. There are also ATMs for crypto in Reno and Henderson. Nevada has generally been welcoming of crypto and no harsh measures have been taken to try to stifle the crypto economy.