Virtual currency kiosks

AN ACT Relating to virtual currency transaction kiosks; amending 1
RCW 19.230.030, 19.230.370, and 19.230.010; adding new sections to 2
chapter 19.230 RCW; prescribing penalties; and providing an effective 3
date. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
Sec. 1. RCW 19.230.030 and 2017 c 30 s 3 are each amended to 6
read as follows: 7
(1) A person may not engage in the business of money 8
transmission, or advertise, solicit, or hold itself out as providing 9
money transmission, unless the person is: 10
(a) Licensed as a money transmitter under this chapter;11
(b) An authorized delegate of a person licensed as a money 12
transmitter under this chapter; or 13
(c) Excluded under RCW 19.230.020. 14
(2) A money transmitter license is not transferable or 15
assignable. 16
(3) A person who owns, operates, solicits, markets, advertises, 17
or facilitates virtual currency transaction kiosks in this state is 18
deemed to be engaged in the business of money transmission in this 19
state and is subject to licensure under this chapter. A person 20
operating a virtual currency transaction kiosk outside of a license 21
H-0392.1
HOUSE BILL 1268
State of Washington 69th Legislature 2025 Regular Session
By Representatives Hackney and Ryu
Read first time 01/14/25. Referred to Committee on Consumer
Protection & Business.
p. 1 HB 1268
is considered in violation of this chapter and subject to penalties 1
as determined by the director. 2
(4) Not later than 15 days after the date a virtual currency 3
licensee ceases to engage in the business of money transmission in 4
this state for any reason, including a business decision to terminate 5
operations in this state, license revocation, bankruptcy, or 6
voluntary dissolution, such licensee must request surrender of the 7
license for each location where such licensee has ceased to engage in 8
such business. The licensee must also identify, in writing, to the 9
director the location where the records of the licensee will be 10
stored and the name, address, and telephone number of an individual 11
authorized to provide access to the records. The surrender of a 12
license does not reduce or eliminate the licensee's civil or criminal 13
liability arising from actions undertaken by the director to revoke 14
or suspend a license, assess a civil penalty, order restitution, or 15
exercise any authority of the director.16
Sec. 2. RCW 19.230.370 and 2017 c 30 s 21 are each amended to 17
read as follows: 18
(1) Virtual currency licensees must provide to any person seeking 19
to use the licensee's products or services the disclosures required 20
by subsections (2) through (6) of this section. 21
(2) As applicable, virtual currency licensees must make the 22
following disclosures: 23
(a) A schedule of all fees and charges the licensee may assess on 24
a transaction, how the fees and charges will be calculated if not set 25
in advance and disclosed, and the timing of the fees and charges.26
(b) Whether the product or service provided is insured or 27
guaranteed by an agency of the United States, such as the federal 28
deposit insurance corporation or the securities investor protection 29
corporation or by private insurance against theft or loss, including 30
cybertheft or theft by other means. 31
(c) A notice that the transfer of virtual currency or digital 32
units is irrevocable and any exception to the irrevocability of 33
transfer. 34
(((d) A notice describing the licensee's liability for 35
unauthorized, mistaken, or accidental transfers and, describing the 36
user's responsibility for providing notice of such mistake to the 37
licensee and of general error-resolution rights applicable to any 38
transaction.))39
p. 2 HB 1268
(3) Separate and in addition to the disclosures required under 1
subsections (2), (4), and (5) of this section, before entering into a 2
virtual currency transaction for, on behalf of, or with a person, a 3
virtual currency transaction kiosk operator must disclose all 4
material risks generally associated with virtual currency. The 5
disclosure must be displayed on the screen of the virtual currency 6
transaction kiosk with the ability for a person to acknowledge the 7
receipt of the disclosures. The disclosures must include at least the 8
following information:9
(a) Virtual currencies are not backed or insured by the 10
government, and accounts and value balances are not subject to 11
federal deposit insurance corporation, national credit union 12
administration, securities investor protection, or corporation 13
protections;14
(b) Some virtual currency transactions are deemed to be made when 15
recorded on a public ledger, which may not be the date or time when 16
the person initiates the transaction;17
(c) The value of a virtual currency may be derived from market 18
participants continued willingness to exchange fiat currency for 19
virtual currency, which may result in the permanent and total loss of 20
a particular virtual currency's value if the market for the virtual 21
currency disappears;22
(d) There is no assurance that a person who accepts virtual 23
currency as a payment today will do so in the future;24
(e) The volatility and unpredictability of the price of virtual 25
currencies relative to fiat currency may result in a significant loss 26
over a short period;27
(f) Virtual currency transactions are irreversible and may be 28
used by scammers, including those impersonating loved ones, 29
threatening jail time, stating that your identity is stolen, and 30
insisting you withdraw money from your bank account and purchase 31
cryptocurrency;32
(g) The nature of virtual currency means that any technological 33
difficulties experienced by the virtual currency transaction kiosk 34
operator may prevent access to or use of a person's virtual currency; 35
and36
(h) Any bond maintained by the licensee for the benefit of a 37
person may not cover all losses the person incurs.38
(4) Before entering into a virtual currency transaction for, on 39
behalf of, or with a person, a virtual currency transaction kiosk 40
p. 3 HB 1268
operator must provide an additional disclosure, which must be 1
acknowledged by the person, written prominently and in bold type, and 2
provided separately from the disclosures in subsections (2), (3), and 3
(5) of this section, stating: "WARNING: LOSSES DUE TO FRAUDULENT OR 4
ACCIDENTAL TRANSACTION ARE NOT RECOVERABLE AND TRANSACTIONS IN 5
DIGITAL FINANCIAL ASSETS ARE IRREVERSIBLE." 6
(5) Licensees must provide any additional disclosures the 7
director may require as set forth in rule. 8
(((4))) (6) Disclosures required by this section must be9
((made)):10
(a) Made separately from any other information provided by the 11
licensee ((and));12
(b) Made in a clear and conspicuous manner; and13
(c) Legibly written in English. 14
NEW SECTION. Sec. 3. A new section is added to chapter 19.230 15
RCW to read as follows: 16
(1) Each money transmitter licensee who owns, operates, solicits, 17
markets, advertises, or facilitates virtual currency transaction 18
kiosks in this state must maintain a detailed plan and accounting as 19
to how the licensee must engage in winding down operations, and must 20
provide such plan and accounting to the director upon request. Such 21
plan and accounting must contain: 22
(a) A record showing that the licensee's minimum net worth and 23
reserves are sufficient to prevent losses to consumers and purchasers 24
and to repay any outstanding obligations or accounts payable;25
(b) Procedures to ensure that, after winding down operations, the 26
licensee does not retain any consumer funds, purchaser funds, or 27
other client funds; 28
(c) A plan demonstrating that consumers have access to consumer 29
funds in the licensee's custody; 30
(d) Detailed instructions informing consumers how they may 31
withdraw consumer funds upon request; and 32
(e) Any other records and information requested by the director 33
regarding winding down operations. 34
(2) No licensee who owns, operates, solicits, markets, 35
advertises, or facilitates virtual currency transaction kiosks in 36
this state may terminate such licensee's business unless the 37
following conditions are met: 38
p. 4 HB 1268
(a) The licensee provides written notice to the director of the 1
proposed termination at least 30 days prior to the effective date of 2
such proposed termination; 3
(b) The licensee notifies, in writing, all consumers, purchasers, 4
and users of the licensee of the proposed termination, and the date 5
of such proposed termination, at least 30 days prior to the date of 6
such proposed termination; 7
(c) The licensee provides all consumers, purchasers, and users of 8
the licensee with detailed final accountings of the accounts of such 9
consumers, purchasers, and users; 10
(d) The licensee remits all money held in the custody of the 11
licensee on behalf of consumers, purchasers, and users to such 12
consumers, purchasers, and users; and 13
(e) The licensee files a request to surrender such licensee's 14
license, and the director accepts such request. 15
(3) Each owner or operator of a virtual currency transaction 16
kiosk must: 17
(a) Gather and maintain full know-your-customer information in 18
accordance with federal reporting requirements; 19
(b) Maintain restrictions that prevent more than one customer of 20
such owner or operator from using the same virtual currency wallet;21
(c) Be able to prevent designated virtual currency wallets from 22
being used at any virtual currency transaction kiosk owned or 23
operated by such owner or operator; 24
(d) Use an established third party that specializes in performing 25
blockchain analyses to preemptively perform such analyses to identify 26
and prevent high-risk or sanctioned virtual currency wallets from 27
being used by customers at virtual currency transaction kiosks owned 28
or operated by such owner or operator; 29
(e) Define, in such owner or operator's policies and procedures, 30
a risk-based method of monitoring customers of such owner or operator 31
on a posttransaction basis; 32
(f) Offer, during the hours of operation of the virtual currency 33
transaction kiosks owned or operated by such owner or operator, live 34
customer support by telephone from a telephone number prominently 35
displayed at or on such virtual currency transaction kiosks;36
(g) Designate and employ a chief compliance officer who shall:37
(i) Be qualified to coordinate and monitor a compliance program 38
to ensure compliance with this section and all other applicable 39
federal and state laws and rules; 40
p. 5 HB 1268
(ii) Be employed on a full-time basis by such owner or operator; 1
and 2
(iii) Not own more than 20 percent of the virtual currency 3
transaction kiosk or operator that employs such officer; and4
(h) Use full-time employees to fulfill the owner or operator's 5
compliance responsibilities under federal and state laws and rules.6
(4)(a) Subject to (b) and (c) of this subsection (4), each 7
operator of a virtual currency transaction kiosk must demonstrate and 8
maintain tangible net worth calculated at $10,000 for every 9
$1,000,000 of total company-wide money transmission and payment 10
instrument dollar volume over the previous 12 months.11
(b) The minimum tangible net worth is $10,000 and the maximum 12
required tangible net worth is $3,000,000. 13
(c) The minimum tangible net worth if the company provides 14
digital financial asset storage is $100,000. 15
NEW SECTION. Sec. 4. A new section is added to chapter 19.230 16
RCW to read as follows: 17
The owner or operator of a virtual currency transaction kiosk 18
shall, upon the completion of any virtual currency transaction, 19
provide to the customer a receipt containing the following 20
information: 21
(1) The name of, and contact information for, the owner or 22
operator including, but not limited to, the owner or operator's 23
business address and a customer service telephone number established 24
by the owner or operator to answer questions and register complaints;25
(2) The customer's name; 26
(3) The type, value, date, and precise time of such virtual 27
currency transaction, and each virtual currency address;28
(4) The amount of such virtual currency expressed in United 29
States currency; 30
(5) The full unique transaction hash or identification number;31
(6) The public virtual currency address of the customer;32
(7) The unique identifier; 33
(8) Any fee charged including, but not limited to, any fee 34
charged directly or indirectly by the owner, operator, or a third 35
party involved in such virtual currency transaction; and36
(9) The exchange rate, if applicable. 37
p. 6 HB 1268
Sec. 5. RCW 19.230.010 and 2017 c 30 s 1 are each amended to 1
read as follows: 2
The definitions in this section apply throughout this chapter 3
unless the context clearly requires otherwise. 4
(1) "Affiliate" means any person who directly or indirectly 5
through one or more intermediaries, controls, is controlled by, or is 6
under common control with, another person. 7
(2) "Annual assessment due date" means the date specified in rule 8
by the director upon which the annual assessment is due.9
(3) "Applicant" means a person that files an application for a 10
license under this chapter, including the applicant's proposed 11
responsible individual and executive officers, and persons in control 12
of the applicant. 13
(4) "Authorized delegate" means a person a licensee designates to 14
provide money services on behalf of the licensee. A person that is 15
exempt from licensing under this chapter cannot have an authorized 16
delegate. 17
(5) "Board director" means a natural person who is a member of 18
the applicant's or licensee's board of directors if the applicant is 19
a corporation or limited liability company, or a partner if the 20
applicant or licensee is a partnership. 21
(6) "Closed loop prepaid access" means prepaid access that can 22
only be redeemed for a limited universe of goods, intangibles, 23
services, or other items provided by the issuer of the prepaid 24
access, its affiliates, or others involved in transactions 25
functionally related to the issuer or its affiliates.26
(7) "Control" means: 27
(a) Ownership of, or the power to vote, directly or indirectly, 28
at least twenty-five percent of a class of voting securities or 29
voting interests of a licensee or applicant, or person in control of 30
a licensee or applicant; 31
(b) Power to elect a majority of executive officers, managers, 32
directors, trustees, or other persons exercising managerial authority 33
of a licensee or applicant, or person in control of a licensee or 34
applicant; or 35
(c) Power to exercise directly or indirectly, a controlling 36
influence over the management or policies of a licensee or applicant, 37
or person in control of a licensee or applicant. 38
(8) "Currency exchange" means exchanging the money of one 39
government for money of another government, or holding oneself out as 40
p. 7 HB 1268
able to exchange the money of one government for money of another 1
government. The following persons are not considered currency 2
exchangers: 3
(a) Affiliated businesses that engage in currency exchange for a 4
business purpose other than currency exchange; 5
(b) A person who provides currency exchange services for a person 6
acting primarily for a business, commercial, agricultural, or 7
investment purpose when the currency exchange is incidental to the 8
transaction; 9
(c) A person who deals in coins or a person who deals in money 10
whose value is primarily determined because it is rare, old, or 11
collectible; and 12
(d) A person who in the regular course of business chooses to 13
accept from a customer the currency of a country other than the 14
United States in order to complete the sale of a good or service 15
other than currency exchange, that may include cash back to the 16
customer, and does not otherwise trade in currencies or transmit 17
money for compensation or gain. 18
(9) "Currency exchanger" means a person that is engaged in 19
currency exchange. 20
(10) "Director" means the director of financial institutions.21
(11) "Executive officer" means a president, chairperson of the 22
executive committee, chief financial officer, responsible individual, 23
or other individual who performs similar functions.24
(12) "Financial institution" means any person doing business 25
under the laws of any state or the United States relating to 26
commercial banks, bank holding companies, savings banks, savings and 27
loan associations, trust companies, or credit unions.28
(13) "Licensee" means a person licensed under this chapter. 29
"Licensee" also means any person, whether located within or outside 30
of this state, who fails to obtain a license required by this 31
chapter. 32
(14) "Material litigation" means litigation that according to 33
generally accepted accounting principles is significant to an 34
applicant's or a licensee's financial health and would be required to 35
be disclosed in the applicant's or licensee's annual audited 36
financial statements, report to shareholders, or similar records.37
(15) "Mobile location" means a vehicle or movable facility where 38
money services are provided. 39
p. 8 HB 1268
(16) "Money" means a medium of exchange that is authorized or 1
adopted by the United States or a foreign government or other 2
recognized medium of exchange. "Money" includes a monetary unit of 3
account established by an intergovernmental organization or by 4
agreement between two or more governments. 5
(17) "Money services" means money transmission or currency 6
exchange. 7
(18) "Money transmission" means receiving money or its equivalent 8
value (equivalent value includes virtual currency) to transmit, 9
deliver, or instruct to be delivered to another location, inside or 10
outside the United States, by any means including but not limited to 11
by wire, facsimile, or electronic transfer. "Money transmission" 12
includes selling, issuing, or acting as an intermediary for open loop 13
prepaid access and payment instruments, but not closed loop prepaid 14
access. "Money transmission" includes all virtual currency 15
transaction kiosk transactions. "Money transmission" does not 16
include: The provision solely of connection services to the internet, 17
telecommunications services, or network access; units of value that 18
are issued in affinity or rewards programs that cannot be redeemed 19
for either money or virtual currencies; and units of value that are 20
used solely within online gaming platforms that have no market or 21
application outside of the gaming platforms. 22
(19) "Money transmitter" means a person that is engaged in money 23
transmission. 24
(20) "Open loop prepaid access" means prepaid access redeemable 25
at multiple, unaffiliated merchants or service providers, or 26
automated teller machines. 27
(21) "Outstanding money transmission" means the value of all 28
money transmissions reported to the licensee for which the money 29
transmitter has received money or its equivalent value from the 30
customer for transmission, but has not yet completed the money 31
transmission by delivering the money or monetary value to the person 32
designated by the customer. 33
(22) "Payment instrument" means a check, draft, money order, or 34
traveler's check for the transmission or payment of money or its 35
equivalent value, whether or not negotiable. "Payment instrument" 36
does not include a credit card voucher, letter of credit, or 37
instrument that is redeemable by the issuer in goods or services.38
(23) "Person" means an individual, corporation, business trust, 39
estate, trust, partnership, limited liability company, association, 40
p. 9 HB 1268
joint venture; government, governmental subdivision, agency, or 1
instrumentality; public corporation; or any other legal or commercial 2
entity. 3
(24) "Prepaid access" means access to money that has been paid in 4
advance and can be retrieved or transferred through an electronic 5
device or vehicle, such as a card, code, electronic serial number, 6
mobile identification number, or personal identification number.7
(25) "Record" means information that is inscribed on a tangible 8
medium, or that is stored in an electronic or other medium, and is 9
retrievable in perceivable form. 10
(26) "Responsible individual" means an individual who is employed 11
by a licensee and has principal managerial authority over the 12
provision of money services by the licensee in this state.13
(27) "State" means a state of the United States, the District of 14
Columbia, Puerto Rico, the United States Virgin Islands, or any 15
territory or insular possession subject to the jurisdiction of the 16
United States. 17
(28) "Tangible net worth" means the physical worth of a licensee, 18
calculated by taking a licensee's assets and subtracting its 19
liabilities and its intangible assets, such as copyrights, patents, 20
intellectual property, and goodwill. 21
(29) "Unsafe or unsound practice" means a practice or conduct by 22
a licensee or an authorized delegate which creates the likelihood of 23
material loss, insolvency, or dissipation of the licensee's assets, 24
or otherwise materially prejudices the financial condition of the 25
licensee or the interests of its customers. 26
(30) "Virtual currency" means a digital representation of value 27
used as a medium of exchange, a unit of account, or a store of value, 28
but does not have legal tender status as recognized by the United 29
States government. "Virtual currency" does not include the software 30
or protocols governing the transfer of the digital representation of 31
value or other uses of virtual distributed ledger systems to verify 32
ownership or authenticity in a digital capacity when the virtual 33
currency is not used as a medium of exchange. 34
(31) "Virtual currency address" means an alphanumeric identifier 35
representing a destination for a virtual currency transfer that is 36
associated with a virtual currency wallet.37
(32) "Virtual currency transaction kiosk" means an electronic 38
information processing device that is capable of accepting or 39
dispensing cash in exchange for a virtual currency.40
p. 10 HB 1268
(33) "Virtual currency transaction kiosk transaction" means:1
(a) A transaction conducted or performed, in whole or in part, by 2
electronic means via a virtual currency transaction kiosk; or3
(b) A transaction made at a virtual currency transaction kiosk to 4
purchase currency with fiat currency or to sell virtual currency for 5
fiat currency.6
(34) "Virtual currency wallet" means a software application or 7
other mechanism providing a means for holding, storing, and 8
transferring virtual currency.9
NEW SECTION. Sec. 6. This act takes effect January 1, 2026.10
--- END ---
p. 11 HB 1268