Bitcoin ATM Company Stops Operations In Connecticut, Here's Why

Bitcoin ATM in one of the US minimarkets. (Photo; Doc. ATM marketplace)

JAKARTA Bitcoin of America as the provider of Bitcoin ATM services plans to stop its operations in a US state of Connecticut. The move was taken following reports related to four consumers who were victims of fraud related to the Bitcoin ATM machine. The four victims suffered losses of about tens of thousands of US dollars.

In addition, the Connecticut Banking Department accused Bitcoin of America of operating without a license in the state. This prompted the department to issue a warning to Bitcoin ATM machine providers. Even so, Bitcoin of America claims to have compensated four consumers for victims of fraud with USD 86,000 (approximately IDR 1.2 billion).

Setelah dilakukan dakwaan pidana, perusahaan ini sekarang akan menghentikan operasinya di Connecticut. Komisaris perbankan negara bagian tersebut, Jorge Perez, mengeluarkan peringatan terhadap penggunaan kios ATM kripto tanpa lisensi itu.

Perez assessed that there were indications of investors being tricked into depositing cash into crypto kiosks. They are also encouraged to transfer certain cryptocurrencies to fraudsters.

Bitcoin of America, which allows the transfer of consumer funds to third parties, is required to have a license as a money sender. Currently, legislation is being developed and is going through a process in state legislature to impose more consumer regulation and protection, and demand licenses for digital currency kiosks as money senders in Connecticut.

The Connecticut State Police, Banking Department, Attorney General's Office, and the Connecticut Consumer Protection Department have jointly issued fraudulent warnings against the use of these unlicensed crypto kiosks and Bitcoins.

Connecticut isn't the only state experiencing problems with crypto ATMs. In Ohio, for example, 52 crypto kiosks and Bitcoin of America ATMs allegedly used in fraud were seized in March.

This reflects the trend of taking action against licensing crypto operations that have a negative impact on Bitcoin ATM networks as a whole. In just a month, namely in March, about 3,627 crypto ATMs have been closed. This condition has an impact on the biggest monthly drop in the history of crypto ATMs in the US.

Previously, the leading US Bitcoin ATM provider Coin Cloud filed for bankruptcy on January 8, 2023. Coin Cloud was affected by the collapse of a number of crypto companies such as FTX, Alameda Research, and BlockFi.