Digital Asset Market Clarity Act

(3) Digital asset; digital asset address; digital asset kiosk; digital asset kiosk operator. The terms digital asset, digital asset address, digital asset kiosk, and digital asset kiosk operator have the meanings given those terms, respectively, in section 5337.

(f) Registration of digital asset kiosk locations

(1) In general. Not later than 90 days after the effective date of this subsection, and not less than once every 90 days thereafter, the Secretary of the Treasury shall require digital asset kiosk operators to submit an updated list containing the physical address of each digital asset kiosk owned or operated by the digital asset kiosk operator.

(2) Form and manner of registration. Each submission by a digital asset kiosk operator pursuant to paragraph (1) shall include—

(A) the legal name of the digital asset kiosk operator;

(B) any fictitious or trade name of the digital asset kiosk operator;

(C) the physical address of each digital asset kiosk owned, operated, or managed by the digital asset kiosk operator that is located in the United States or the territories of the United States;

(D) the start date of operation of each digital asset kiosk;

(E) the end date of operation of each digital asset kiosk, if applicable; and

(F) each digital asset address used by the digital asset kiosk operator.

(3) False and incomplete information. The filing of false or materially incomplete information in a submission required under paragraph (1) shall be deemed a failure to comply with the requirements of this subsection.

5337. Digital asset kiosk fraud prevention

(a) Definitions. In this section:

(1) Customer. The term customer means any person that purchases or sells digital assets through a digital asset kiosk.

(2) Distributed ledger analytics. The term distributed ledger analytics means the analysis of data from public distributed ledgers, and associated transaction information, to provide risk-specific information about digital asset transactions and digital asset addresses.

(3) Digital asset. The term digital asset has the meaning given the term in section 2 of the GENIUS Act (12 U.S.C. 5901).

(4) Digital asset address. The term digital asset address means an alphanumeric identifier associated with a digital asset wallet identifying the location to which a digital asset purchased through a digital asset kiosk can be sent or from which a digital asset sold through a digital asset kiosk can be accessed.

(5) Digital asset kiosk. The term digital asset kiosk means a stand-alone machine that is capable of accepting or dispensing legal tender in exchange for digital assets.

(6) Digital asset kiosk operator. The term digital asset kiosk operator means a person who owns, operates, or manages a digital asset kiosk located in the United States or its territories.

(7) Digital asset kiosk transaction. The term digital asset kiosk transaction means the purchase or sale of digital assets via a digital asset kiosk.

(8) Digital asset wallet. The term digital asset wallet means a software application or other mechanism providing a means for holding, storing, and transferring digital assets.

(9) FinCEN. The term FinCEN means the Financial Crimes Enforcement Network of the Department of the Treasury.

(10) New customer. The term new customer, with respect to a digital asset kiosk operator, means a customer during the 14-day period beginning on the date of the first digital asset kiosk transaction of the customer with the digital asset kiosk operator.

(11) Transaction hash. The term transaction hash means a unique identifier made up of a string of characters that act as a record of and provide proof that a transaction was verified and added to the distributed ledger.

(b) Disclosures

(1) In general. Before entering into a digital asset transaction with a customer, a digital asset kiosk operator shall disclose in a clear, conspicuous, and easily readable manner—

(A) all relevant terms and conditions of the digital asset kiosk transaction, including—

(i) the amount of the digital asset kiosk transaction;

(ii) the type and nature of the digital asset kiosk transaction;

(iii) a warning that the digital asset kiosk transaction is final, is not refundable, and may not be reversed; and

(iv) the type and amount of any fees or other expenses paid by the customer;

(B) a warning relating to consumer fraud including—

(i) that consumer fraud often starts with contact from a stranger, and that the customer should never send money to someone the customer does not know;

(ii) the most common types of fraudulent schemes involving digital asset kiosks, such as—

(I) impersonation of a government official or a bank representative;

(II) threats of jail time or financial penalties;

(III) offers of a job or reward in exchange for payment, or offers of deals that seem too good to be true;

(IV) claims of a frozen bank account or credit card;

(V) requests for donations to charity or disaster relief; or

(VI) payment to an individual the customer has never met; and

(iii) a statement that the customer should contact law enforcement if they suspect fraudulent activity, such as scams, including contact information for a relevant law enforcement or government agency.

(2) Additional disclosures. FinCEN may adopt rules relating to additional disclosures required to be made to customers prior to engaging in a transaction.

(c) Acknowledgment of disclosures. Each time a customer uses a digital asset kiosk, the digital asset kiosk operator shall ensure acknowledgment of all disclosures required under subsection (b) via confirmation of consent of the customer at the digital asset kiosk.

(d) Receipts. Upon completion of each digital asset kiosk transaction, the digital asset kiosk operator shall provide the customer with a receipt, which shall include the following information:

(1) The name and contact information of the digital asset kiosk operator, including a telephone number for a customer service helpline.

(2) The name of the customer.

(3) The type, value, date, and precise time of the digital asset kiosk transaction, transaction hash, and each applicable digital asset address.

(4) The amount of the digital asset kiosk transaction expressed in United States dollars.

(5) All fees charged.

(6) A statement that the customer should contact law enforcement if they suspect fraudulent activity, such as scams, including contact information for a relevant law enforcement or government agency.

(7) The exchange rate applied.

(8) Any additional information the digital asset kiosk operator determines appropriate.

(e) Physical receipts available. A physical version of the receipt required under subsection (d) shall be issued to the customer at the time of the digital asset kiosk transaction, if the customer opts for such a physical version of the receipt.

(f) Anti-Fraud policy

(1) In general. Each digital asset kiosk operator shall establish, maintain, and implement a written anti-fraud policy if required by, and consistent with, applicable State law in those States where the digital asset kiosk operator is licensed.

(2) Federal standard. A digital asset kiosk operator operating in any State that does not require an anti-fraud policy under paragraph (1) shall establish, maintain, and implement an anti-fraud policy that, at a minimum, includes—

(A) the identification and assessment of fraud-related areas;

(B) procedures and controls to protect against risks identified under subparagraph (A);

(C) allocation of responsibility for monitoring the risks identified under subparagraph (A); and

(D) procedures for the periodic evaluation and revision of the anti fraud procedures, controls, and monitoring mechanisms under subparagraphs (B) and (C).

(g) Appointment of compliance officer. Each digital asset kiosk operator shall designate and employ a compliance officer who—

(1) is qualified to coordinate and monitor compliance with this section and all other applicable Federal and State laws, rules, and regulations;

(2) is employed full-time by the digital asset kiosk operator;

(3) is not the chief executive officer of the digital asset kiosk operator; and

(4) does not own or control more than 10 percent of any interest in the digital asset kiosk operator.

(h) Use of distributed ledger analytics and wallet pinning

(1) In general. Each digital asset kiosk operator shall use distributed ledger analytics to prevent sending a digital asset to a digital asset wallet known to be affiliated with fraudulent activity at the time of a digital asset kiosk transaction and to detect transaction patterns indicative of fraud or other illicit activities.

(2) Wallet pinning. Each digital asset kiosk operator shall maintain restrictions that prevent more than 1 customer of the digital asset kiosk operator from using the same digital wallet address.

(3) Compliance. The Director of FinCEN may request evidence from any digital asset kiosk operator to confirm compliance with this subsection.

(i) Confirmation required before new customer transactions. Before entering into a digital asset kiosk transaction valued at $500 or more with a new customer, the digital asset kiosk operator shall obtain confirmation from the new customer that—

(1) the new customer wishes to proceed with the digital asset kiosk transaction; and

(2) the new customer is not being fraudulently induced into engaging in the transaction.

(j) Holding period. No digital asset kiosk operator shall execute a transaction on behalf of a new customer that sends digital assets to a specific wallet address unless at least 72 hours have elapsed since the initiation of the transaction by the new customer.

(k) Transaction limits with respect to new customers. The Secretary of the Treasury shall prescribe by regulation the threshold amounts for reporting or limiting digital asset kiosk transactions, including aggregate or single-day deposit and withdrawal limits, as the Secretary determines are reasonably necessary to deter fraud and illicit finance. Such regulations shall consider the unique risks and functionalities of digital asset kiosks and may provide for exceptions, adjustments, or exclusions as deemed appropriate by the Secretary.

(l) Interim transaction limits. Until the effective date of regulations prescribed under subsection (k), a digital asset kiosk operator shall not permit a new customer to conduct transactions exceeding $3,500 in the aggregate within any 24-hour period.

(m) Refunds. A digital asset kiosk operator shall issue a refund for a customer’s transaction fees within 30 days if—

(1) the customer was fraudulently induced into engaging in the digital asset kiosk transaction; and

(2) the customer files a complaint to the digital asset kiosk operator, which includes—

(A) the name, address, and phone number of the customer;

(B) the transaction hash of the digital asset kiosk transaction or information sufficient to establish the type, value, date, and time of the digital asset kiosk transaction; and

(C) a copy of a report to a State or local law enforcement or government agency made not later than 30 days after the digital asset kiosk transaction.

(n) Customer service helpline. Each digital asset kiosk operator shall provide live customer service during business hours, the phone number for which is regularly monitored and displayed in a clear, conspicuous, and easily readable manner upon each digital asset kiosk. During non-business hours, the digital asset kiosk operator shall maintain an alternative customer service system that may include an automated chatbot, an online complaint reporting portal, or other customer service mechanism.

(o) Communications with law enforcement. Each digital asset kiosk operator performing business in the United States shall have a dedicated method of contact, such as a phone number, email address, or other contact method, for law enforcement and regulatory agencies to contact the digital asset kiosk operator. This contact method shall be displayed and available on the digital asset kiosk operator’s website.

(p) Civil penalties and state enforcement. Any State regulator may bring a civil action or other appropriate proceeding to enforce the provisions of this section and may assess or collect civil penalties or other remedies for violations of this section, as provided under applicable State law.

(q) Rule of construction. Nothing in this section may be construed to prohibit a State from enacting a law, rule, or regulation that provides greater protection to customers.

5337. Digital asset kiosk fraud prevention.