The order came shortly after malicious actors used Bitcoin of America ATMs to scam crypto investors.
Amidst a volatile digital market landscape, Bitcoin of America, a notable provider of Bitcoin (BTC) and other cryptocurrency ATMs, has agreed to suspend its operations within Connecticut due to licensure deficiencies.
The decision followed the Connecticut Department of Banking's rigorous regulatory enforcement, ensuring the safety of crypto enthusiasts in the state.
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On May 22nd, the Department of Banking revealed that Bitcoin of America had not acquired the necessary permits to run their Bitcoin ATM kiosks within the state's boundaries.
This revelation came to light following an unfortunate incident where four local consumers fell prey to a scam involving the Bitcoin of America ATMs, leading to significant financial losses.
In the wake of this issue, Bitcoin of America was compelled to make restitution, with the consumers receiving a total of $86,000. The official statement declared:
As a result of the consent order, Bitcoin of America made restitution to these consumers totaling $86,000. Following a criminal indictment, Bitcoin of America is winding down operations here in Connecticut.
Commissioner Jorge Perez subsequently warned about the risks associated with unlicensed cryptocurrency ATMs. The Commissioner emphasized that scammers often exploit these platforms to deceive investors into converting their cash into cryptocurrencies, which are then transferred directly to the fraudsters.
Following the cease of operations, an urgent scam alert was issued by the Department of Banking, Connecticut State Police, the Office of the Attorney General, and the Department of Consumer Protection, cautioning against using unlicensed cryptocurrency and Bitcoin ATMs.
It is noteworthy that the crackdown on unlicensed activities, combined with geopolitical turbulence worldwide, has led to a decline in the Bitcoin ATM network.
The network saw a record monthly decline in March when 3,627 crypto ATMs were taken offline. A steady decline in net crypto ATM installations has been recorded over four consecutive months from September 2022 to March 2023.
The suspension of Bitcoin of America's ATM operations in Connecticut marks a significant move in the crypto world. It serves as a cautionary tale for cryptocurrency enthusiasts, emphasizing the necessity of abiding by licensing laws and regulations to ensure safe and secure transactions.
