- Senate Bill 386 requires crypto kiosk operators to obtain money transmitter licenses
- Daily transaction limits capped at $1,000 with mandatory fraud warnings displayed
- Customer identification requirements include photo verification for each transaction
Wisconsin Democratic senators have introduced legislation targeting cryptocurrency kiosks with regulatory requirements.
These include licensing mandates, transaction limits, and enhanced consumer protections. Senate Bill 386, introduced on August 11, 2025, seeks to classify virtual currency kiosk operators as money transmitters under state banking regulations.
The bipartisan legislation, sponsored by Senators Roys, Wall, Dassler-Alfheim, Drake, Hesselbein, Keyeski, and Ratcliff, addresses growing concerns about fraud targeting cryptocurrency users through automated terminals.
The bill defines virtual currency kiosks as electronic terminals or retail locations enabling exchanges between fiat currency and digital assets.
Strict Licensing and Warning Requirements Imposed For Crypto Kiosk
No person will be permitted to run cryptocurrency kiosks in Wisconsin under the new law unless they possess a money transmitter license from the Division of Banking.
This duty applies existing monetary services rules to cover digital asset exchange terminals already in business with minimal regulatory oversight.
The law mandates prominent fraud warnings on all kiosk terminals, with operators obligated to post some wording warning consumers of common scam methods. The warning must be posted as a real sign on the front of each terminal and on-screen electronically before consumers can start transactions.
The required warning notice clearly warns against the transfer of virtual currency to strangers posing as government representatives, law enforcement agents, or charities.
Customers must affirmatively acknowledge the warning before completing any transaction, creating an additional barrier against fraud-induced transfers.
Customer Identification and Transaction Limitations
The bill establishes identity verification requirements for all kiosk users. Operators must get customers’ full legal names, birthdays, contact details, and photocopies of government-issued identification documents such as driver’s licenses or passports before they can make first-time transactions.
In every transaction, customer identity must be verified and photographs taken in reproducible formats.
The legislation prohibits the customers from making the transactions in names that do not belong to them or providing fake names, closing gaps for anonymous transfers.
The ceilings for each day are fixed at $1,000 per customer for all kiosks operated by the same organization.
This restriction is intended to exclude fraudulent losses while keeping open access to legitimate users who are conducting smaller cryptocurrency transactions or sales.
Fee Limitations and Refund Protections
Transaction fees are limited to the greater of $5 or 3% of the transaction amount, along with any price differential between market prices and kiosk prices.
This measure is meant to address complaints of exorbitant fees levied by certain operators who are exploiting customer convenience or ignorance of market conditions.
The legislation has compulsory refund clauses for victims of fraud in specific situations. Operators are to provide full refunds where customers were induced into transactions fraudulently and notified the operator and law enforcement agencies within 30 days.
Eligibility for refunds demands that consumers prove they were tricked into sending money, generally by romance scams, government impersonation scams, or other types of scams.
The 30-day reporting condition puts time pressures on fraud victims but also provides reasonable timescales for refunding duties to operators.
Implementation Plan and Enforcement
Customer verification requirements take effect 60 days after the bill is enacted, to allow operators to implement new verification equipment.
The Division of Banking will adopt and enforce the new requirements as part of existing money transmitter supervision regimes.
The legislation addresses regulatory gaps in the regulation of cryptocurrency kiosks, which have operated with minimal regulation while handling millions of dollars in transactions.
State authorities were also concerned with the application of these terminals for fraud and money laundering against vulnerable people.
