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HB2232 - 572R - I Ver
REFERENCE TITLE:
DIFI; cryptocurrency kiosk operator; license
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HB 2232
Introduced by
Representative
Blackman
AN
ACT
amending title 6, chapter 12, article 1,
arizona revised statutes, by adding sections 6-1237 and 6-1237.01;
appropriating monies; relating to money transmission.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 6, chapter 12, article 1,
Arizona Revised Statutes, is amended by adding sections 6-1237 and 6-1237.01,
to read:
START_STATUTE
6-1237.
Cryptocurrency kiosk operators; licensure; requirements for
operating cryptocurrency kiosks; civil penalties; violation; classification;
rules; definitions
A. On or before January 1, 2027, a
person who wishes to operate a cryptocurrency kiosk shall obtain a license that
is issued by the department.
B. An applicant shall submit a
complete application on a form as prescribed by the department that includes
the names of all owners and managers of the cryptocurrency kiosk. If
the director denies the application, the applicant is entitled to a hearing
pursuant to title 41, chapter 6, article 10.
C. Each applicant for a
cryptocurrency kiosk operator license shall submit a full set of fingerprints
to the department of insurance and financial INSTITUTIONS to obtain a state and
federal criminal records check pursuant to section 41-1750 and public law
92-544. The department of public safety may exchange this
fingerprint data with the federal bureau of investigation. The
department of INSURANCE and financial institutions shall conduct a review that
includes all of the following:
1. A financial audit of the
applicant's assets and solvency.
2. A review of the past fifteen years
of financial and regulatory history.
3. Verification of the source of the
applicant monies.
D. The department shall deny an
application if the person has a conviction of any of the following:
1. Fraud.
2. Money laundering.
3. Taking the identity of another
person or entity.
4. Participating in or assisting a
criminal syndicate.
5. Any financial crime in which the
person was convicted within the previous fifteen years.
E. A license is valid for one year
after the date of issuance and shall be renewed annually.
F. A cryptocurrency kiosk operator
may not complete any transaction unless all of the following verification steps
are completed:
1. A government-issued
identification is scanned and validated by using authentication technology.
2
. A live
facial capture of the customer is recorded and matched to the government-issued
identification.
3. A two-factor authentication
is performed using a phone verification and a device verification.
4. the customer's address is verified
by using commercially reasonable means.
5. For all transactions that exceed
$300, the customer must certify the purpose of the transaction and COMPLETE a
fraud-screening questionnaire.�
G. Any anonymous, unverifiable or
mismatched transactions are strictly prohibited.
H. A cryptocurrency kiosk operator
shall Freeze any suspicious transaction for at least seventy-two hours on
notification of suspicious activity.
I. for all cryptocurrency kiosks and
cryptocurrency kiosk transactions, A cryptocurrency kiosk operator shall do the
following:
1. Maintain a CONTINUOUS quality
video recording.
2. Maintain a continuous audio
recording of all cryptocurrency kiosk transactions.
3. Maintain a timestamped global
positioning system log of device activity.
4. Maintain a facial capture log for
each customer.
5. Maintain a cryptocurrency kiosk
transaction log for all activity.
6. Retain all the records for at
least seven years.
J. A cryptocurrency kiosk operator
shall report all suspected fraud or coercion to the department, the attorney
general and the local law enforcement agency within fifteen minutes after
discovery.
K. A cryptocurrency kiosk operator
may not:
1. Conduct an anonymous or
unverifiable cryptocurrency kiosk transaction.
2. Disable or obstruct the required
video or audio surveillance.
3. Allow any cryptocurrency kiosk
transaction that exceeds $2,000 in a twenty-four-hour period per
customer.
4. Knowingly assist or facilitate
fraud, coercion, elder exploitation or money laundering.
5. Refuse to provide records pursuant
to a request from the department.
L. EAch cryptocurrency kiosk shall
conspicuously display and audibly play the following warning:
WARNING: cryptocurrency kiosk
transactions are irreversible. If anyone instructed you online, by
telephone or in person to use this cryptocurrency kiosk, STOP
IMMEDIATELY. You may be the target of a scam.� Government agencies,
law enforcement agencies, utility companies and courts DO NOT accept bitcoin or
cryptocurrency as payment.
M. The warning must:
1. Appear on the cryptocurrency kiosk
screen for at least ten seconds before any cryptocurrency kiosk transaction.
2. Be posted physically on the
cryptocurrency kiosk.
3. Be provided in both English and
Spanish.
4. Be read aloud through the
cryptocurrency kiosk audio before proceeding.
N. All customer information, identity
records, cryptocurrency kiosk transactions logs, surveillance footage, facial
captures and suspicious activity reports required by this section are
confidential and may only be provided to:
1. A law enforcement agency.
2. A regulatory agency that is
engaged in an official investigation.
3. A court pursuant to a court order.
4. A federal agency that is engaged
in cybercrime, financial crime or anti-money laundering enforcement.
O. A cryptocurrency kiosk operator
shall provide the following to a law enforcement agency or the department on
request within one hour:
1. A customer identity record.
2. Full cryptocurrency kiosk video
and audio recordings.
3. Facial capture logs.
4. Global positioning system and
device logs.
5. All suspicious ACTIVITY reports.
6. Banking and exchange integration
logs.
P. The department may impose the
following civil penalties against a cryptocurrency kiosk operator that violates
this section:
1. Not more than $50,000 per
violation.
2. $25,000 per day for operating a
cryptocurrency kiosk without a license.
3. Not more than $100,000 for failing
to implement the required surveillance in a cryptocurrency kiosk.
4. Not more than $25,000 per day if
the cryptocurrency kiosk operator fails to DISPLAY the warnings as prescribed
in this section.
Q. Civil penalties collected pursuant
to this section shall be deposited, pursuant to sections 35-146 and 35-147,
IN the digital asset oversight fund established by section 6-1237.01.
R. A cryptocurrency kiosk operator
that:
1. Fails to report suspected fraud is
guilty of a class 4 felony.
2. Fails to freeze a suspicious
cryptocurrency kiosk transaction is guilty of a class 3 felony.�
3. Knowingly assists in fraud is
guilty of a class 2 felony.�
4. knowingly disables surveillance
equipment is guilty of a class 3 felony.
S. The director may establish fees as
prescribed in rule.
T. The department shall adopt rules
that are necessary to implement this section that include:
1. Identity verification standards.
2. Fraud screening procedures.
3. Cryptocurrency kiosk surveillance
standards.
4. Reporting requirements.
5. Recordkeeping standards.
6. Fee schedules and renewal
procedures.
7. Compliance audits.
U. For the purposes of this section,
"Cryptocurrency kiosk", "cryptocurrency kiosk operator" and
"cryptocurrency kiosk transaction" have the same meanings prescribed
in section 6-1236.
END_STATUTE
START_STATUTE
6-1237.01.
Digital asset oversight fund
The DIGITAL asset oversight fund is established
consisting of civil penalties collected pursuant to section 6-1237. THe
department shall administer the fund. Monies in the fund are
continuously appropriated.�
END_STATUTE
Sec. 2.
Appropriation;
department of insurance and financial institutions; exemption
A. The sum of $4,000,000 is
appropriated from the state general fund in fiscal year 2026-2027 to the
department of insurance and financial institutions to administer section 6-1237,
Arizona Revised Statutes, as added by this act.
B. The appropriation made
in subsection A of this section is exempt from the provisions of section
35-190, Arizona Revised Statutes, relating to lapsing of appropriations.