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On July 7, North Carolina enacted House Bill 920, the Virtual Currency Kiosk Consumer Protection Act, establishing a new regulatory framework for virtual currency kiosks operating in the state. The law takes effect January 1, 2027, and requires virtual currency kiosk operators to obtain a money transmitter license while imposing new transaction limits, disclosures, fraud-prevention measures, and other operational requirements.
The law establishes a number of requirements for virtual currency kiosk operators. Specifically, the law:
- Imposes transaction limits and mandatory holds. Operators must limit daily transactions to $2,000 for new customers and $5,000 for existing customers. Transactions initiated by customers whose first transaction occurred within the prior seven days are also subject to a 48-hour hold.
- Caps fees and establishes refund requirements. Aggregate fees and charges, including the spread, cannot exceed 12% of the transaction amount. The law also requires certain refunds when a customer reports fraud within 30 days and the Commissioner determines that the transaction was fraudulent.
- Requires enhanced fraud controls. Operators must implement interactive fraud-warning screens, use blockchain analytics, maintain written anti-fraud policies, and provide live customer service whenever kiosks are available for public use. If a customer indicates that a fraud warning applies, the transaction must be terminated and the customer must be blocked from kiosk access for at least 24 hours.
- Restricts kiosk authentication methods. Operators may not permit customers to access or authenticate accounts using QR codes, barcodes, or similar scan-based methods, subject to limited identity-verification exceptions.
- Expands compliance requirements. Operators must maintain board-approved compliance policies and employ full-time compliance and consumer protection officers.
Violations constitute unfair trade practices under North Carolina law and may result in civil penalties of up to $1,000 for a first offense and $5,000 for subsequent offenses.
Putting It Into Practice: North Carolina joins a growing number of states imposing kiosk-specific licensing and consumer protection requirements (previously discussed here, here, and here). Operators should evaluate whether existing kiosk software and compliance programs can accommodate the new transaction holds, fee cap, refund procedures, fraud-screen requirements, and QR-code restrictions before January 1, 2027. Multi-state operators should continue monitoring differing state requirements and update compliance procedures as additional states regulate virtual currency kiosks.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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