SENATE No. 707

The Commonwealth of Massachusetts

In the One Hundred and Ninety-Fourth General Court

(2025-2026)

AN ACT RELATIVE TO PREVENTING FRAUD AND ESTABLISHING REGULATIONS ON CERTAIN VIRTUAL CURRENCIES.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. The General Laws, as appearing in the 2022 Official Edition, are hereby amended by inserting after Chapter 167J the following new chapter:-

Chapter 167K Regulation of Virtual Currency Kiosks

Section 1. As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:

1.New customer. “New customer” means an individual who has never previously transacted with the virtual currency kiosk operator. The new customer shall remain defined as such during the thirty (30) day period after the first financial transaction with the virtual currency kiosk operator.

2.Virtual currency address. "Virtual currency address" means an alphanumeric identifier associated with a virtual currency wallet identifying the location to which a virtual currency transaction can be sent.

3.Transaction hash. "Transaction hash" means a unique identifier made up of a string of characters that act as a record of and provide proof that the transaction was verified and added to the blockchain.

4.Virtual currency wallet. "Virtual currency wallet" means a software application or other mechanism providing a means to hold, store or transfer virtual currency.

5.Virtual currency kiosk. "Virtual currency kiosk" means an electronic terminal acting as a mechanical agent of the virtual currency kiosk operator to enable the virtual currency kiosk operator to facilitate the exchange of virtual currency for money, bank credit, or other virtual currency, including but not limited to by (1) connecting directly to a separate “virtual currency exchange" that performs the actual virtual currency transmission, or (2) drawing upon the virtual currency in the possession of the electronic terminal's operator.

6.Virtual currency kiosk operator. “Virtual-currency kiosk operator" means a person that engages in virtual-currency business activity via a money transmission kiosk located in this State or a person that owns, operates, or manages a money transmission kiosk located in this State through which virtual-currency business activity is offered.

7.Virtual currency kiosk transaction. "Virtual currency kiosk transaction" means a transaction conducted or performed, in whole or in part, by electronic means via a virtual currency kiosk. Virtual currency kiosk transaction also means a transaction made at a virtual currency kiosk to purchase virtual currency with fiat currency or to sell virtual currency for fiat currency.

8.Blockchain. “Blockchain” means a mathematically secured, chronological and decentralized ledger or database.

9.Blockchain analytics. “Blockchain analytics” means the analysis of data from blockchains or public distributed ledgers, including associated transaction information.

10.Blockchain analytics software. “Blockchain analytics software” means a software service that uses blockchain analytics data to provide risk-specific information about virtual currency wallet addresses, among other things.

11.Commissioner. “Commissioner” means the commissioner of banks.

Section 2. A kiosk operator shall not engage in virtual-currency business activity or hold itself out as being able to engage in virtual-currency business activity with or on behalf of another person unless the kiosk operator is licensed in the state as a money transmitter.

a.A virtual currency kiosk operator shall not locate, or allow a third party to locate, a virtual currency kiosk in this State unless the virtual currency kiosk operator registers the money transmission kiosk and obtains the prior approval of the commissioner for its activation.

b.Each virtual currency kiosk operator shall submit a quarterly report of the location of each virtual currency kiosk located within the State within 45 days of the end of the calendar quarter. The location report shall include, at a minimum, the following regarding the location where a virtual currency kiosk is located:

i.Company legal name;

ii.Any fictitious or trade name;

iii.Physical address;

iv.Start date of operation of virtual currency kiosk at location;

v.End date of operation of virtual currency kiosk at location, if applicable; and

vi.Virtual currency address(es) associated with the virtual currency kiosk

Section 3. A virtual currency kiosk operator must disclose in a clear, conspicuous, and easily readable manner in the chosen language of the customer, all relevant terms and conditions generally associated with the products, services, and activities of the virtual currency kiosk operator and virtual currency.

a.Acknowledgment of disclosures. The virtual currency kiosk operator must receive acknowledgement of receipt of all disclosures required under this section via confirmation of consent.

b.Relevant disclosures. The disclosures under this subdivision must address at least the following:

i.A warning, written prominently and in bold type, and provided separately from the disclosures below, stating: "WARNING: LOSSES DUE TO FRAUDULENT OR ACCIDENTAL TRANSACTIONS ARE NOT RECOVERABLE AND TRANSACTIONS IN VIRTUAL CURRENCY ARE IRREVERSIBLE. VIRTUAL CURRENCY TRANSACTIONS MAY BE USED TO STEAL YOUR MONEY BY CRIMINALS IMPERSONATING THE GOVERNMENT, ORGANIZATIONS, OR YOUR LOVED ONES. THEY CAN THREATEN JAIL TIME, SAY YOUR IDENTITY HAS BEEN STOLEN, ALLEGE YOUR COMPUTER HAS BEEN HACKED, INSIST YOU WITHDRAW MONEY FROM YOUR BANK ACCOUNT TO PURCHASE VIRTUAL CURRENCY, OR A NUMBER OF OTHER SCAMS. IF YOU BELIEVE YOU ARE BEING SCAMMED, CALL YOUR LOCAL LAW ENFORCEMENT."

ii.The material risks associated with virtual currency and virtual currency transactions, including:

1.A warning that once completed, the transaction may not be reversed;

2.The virtual currency kiosk operator’s liability for unauthorized virtual currency transactions;

3.The virtual currency kiosk customer’s liability for unauthorized currency transactions;

4.Virtual currency is not legal tender, backed or insured by the government, and accounts and value balances are not subject to Federal Deposit Insurance Corporation, National Credit Union Administration, or Securities Investor Protection Corporation protections;

5.Some virtual currency transactions are deemed to be made when recorded on a public ledger which may not be the date or time when the person initiates the transaction;

6.Virtual currency's value may be derived from market participants' continued willingness to exchange fiat currency for virtual currency, which may result in the permanent and total loss of a particular virtual currency's value if the market for virtual currency disappears;

7.A person who accepts a virtual currency as payment today is not required to accept and might not accept virtual currency in the future

8.The volatility and unpredictability of the price of virtual currency relative to fiat currency may result in a significant loss over a short period;

9.The nature of virtual currency means that any technological difficulties experienced by virtual currency kiosk operators may prevent access to or use of a person's virtual currency; and,

10.Any bond maintained by the virtual currency kiosk operator for the benefit of a person may not cover all losses a person incurs.

iii.The amount of the transaction denominated in US Dollars as well as the applicable virtual currency;

iv.Any fees or expenses charged by the virtual currency kiosk operator;

v.Any applicable exchange rates;

vi.A daily virtual currency transaction limit of no more than $1,000;

vii.Notice of a change in the virtual currency kiosk operator's rules or policies;

viii.The name, address, and telephone number of the owner of the kiosk and the days, time, and means by which a consumer can contact the owner for consumer assistance shall be displayed on or at the location of the virtual currency kiosk, or on the first screen of such kiosk.

ix.Under what circumstances the virtual currency kiosk operator, without a court or government order, discloses a person's account information to third parties;

x.Other disclosures that are customarily given in connection with a virtual currency transaction.

c.Transaction receipt. Upon each transaction's completion, the virtual currency kiosk operator must provide a person with a physical receipt in the language chosen by the customer containing the following information:

i.The virtual currency kiosk operator's name and contact information, including a telephone number to answer questions and register complaints;

ii.The type, value, date, and precise time of the transaction, transaction hash, and each applicable virtual currency address;

iii.The name and contact information of the sender;

iv.The name and contact information of the designated recipient;

v.All fees charged;

vi.The exchange rate of the virtual currency to US Dollars;

vii.A statement of the virtual currency kiosk operator's liability for non-delivery or delayed delivery;

viii.A statement of the virtual currency kiosk operator's refund policy; and,

ix.Any additional information the [relevant state authority] may require.

Section 4. All virtual currency kiosk operators must use blockchain analytics software to assist in the prevention of sending purchased virtual currency from a virtual currency kiosk operator to a virtual currency wallet known to be affiliated with fraudulent activity at the time of a transaction. The commissioner may request evidence from any virtual currency kiosk operator of current use of blockchain analytics.

a.Fraud policy. All virtual currency kiosk operators shall take reasonable steps to detect and prevent fraud, including establishing and maintaining a written anti-fraud policy. The anti-fraud policy shall, at a minimum, include:

i.the identification and assessment of fraud related risk areas;

ii.procedures and controls to protect against identified risks;

iii.allocation of responsibility for monitoring risks; and

iv.procedures for the periodic evaluation and revision of the anti-fraud procedures, controls, and monitoring mechanisms.

b.Compliance officer. Each virtual currency kiosk operator must designate and employ a compliance officer with the following requirements:

i.the individual must be qualified to coordinate and monitor compliance with this Act and all other applicable Federal and State laws, rules, and regulations;

ii.the individual must be employed full-time by the virtual currency kiosk operator; and

iii.the designated compliance officer cannot be any individual who owns more than 20% of the virtual currency kiosk operator by whom the individual is employed.

iv.Compliance responsibilities required under Federal and State laws, rules, and regulations shall be completed by full-time employees of the virtual currency kiosk operator.

c.Refunds for new customers. A virtual currency kiosk operator must issue a refund to a new customer for the full amount of all transactions made within the thirty (30) day new customer time period upon the request of the customer. In order to receive a refund under this section, a new customer must have been fraudulently induced to engage in the virtual currency transactions and contacts the virtual currency kiosk operator and a government or law enforcement to inform them of the fraudulent nature of the transaction agency within ninety (90) days of the last transaction to occur during the thirty (30) day new customer time period.

d.Refunds for existing customers. A virtual currency kiosk operator must issue a refund to an existing customer for the full amount of all transaction fees upon the request of an existing customer. In order to receive a refund under this section, a customer must have been fraudulently induced to engage in the virtual currency transactions and contacts the virtual currency kiosk operator and a government or law enforcement agency to inform them of the fraudulent nature of the transaction within ninety (90) days of the transaction.

Section 5. A virtual-currency kiosk operator shall not accept transactions of more than $1,000 US Dollars of cash or the equivalent in virtual currency in a day in connection with virtual currency kiosk transactions with a single customer in this State via one or more virtual currency kiosks.

Section 6. The aggregate fees and charges, directly or indirectly, charged to a customer related to a single transaction or series of related transactions involving virtual currency effected through a money transmission kiosk in this State, including any difference between the price charged to a customer to buy, sell, exchange, swap, or convert virtual currency and the prevailing market value of such virtual currency at the time of such transaction, shall not exceed the greater of the following:

a.$5.00; or

b.three (3) percent of the U.S. dollar equivalent of virtual currency involved in the transaction or transactions.

Section 7. All virtual currency kiosk operators performing business in the State must provide live customer service at a minimum on Monday through Friday between 8AM EST and 10PM EST. The customer service toll free number must be displayed on the virtual currency kiosk or the virtual currency kiosk screens.

SECTION 2. Chapter 10, of the General Laws, as appearing in the 2022 Official Edition, is hereby amended by inserting after section 78 the following section:-

Section 79. The office of the state treasurer shall develop and periodically review and update a digital module and resources on virtual currencies and digital assets to support Massachusetts residents with overseeing their finances, understanding money management strategies, and protecting their security; provided that, said module shall include curricula specifically tailored for older adults, including with respect to fraud prevention.

SECTION 3. (1) There shall be a special commission established for the purposes of making an investigation relative to blockchain technology to develop a master plan of recommendations for fostering the appropriate expansion of blockchain technology in the Commonwealth.

(2) The commission shall consist of 25 members: the speaker of the house of representatives or a designee who shall serve as co-chair; the minority leader of the house of representatives or a designee; the president of the senate or a designee who shall serve as co-chair; the minority leader of the senate or a designee; four members of the house of representatives appointed by the speaker; four members of the senate appointed by the president; the attorney general or a designee; the chair of the cannabis control commission or a designee; the commissioner of the department of revenue or a designee; the secretary of the executive office of technology services and security or a designee; the secretary of public safety and security or a designee; three persons to be appointed by the state secretary, provided that one shall represent an organization focused on consumer protection; and five persons to be appointed by the governor including one appointee from a financial technology company, one appointee of a company with a business model that uses blockchain technology for purposes other than digital assets and two appointees representing institutions of higher education in the commonwealth.

All appointments shall be made not later than 45 days after the effective date of this act. The chairpersons shall meet with the commission not later than 90 days after the effective date of this act.

(3) The commission shall be charged with examining the following:

(a) The feasibility, validity and admissibility as well as risks, including privacy risks, and benefits of using blockchain technology in state and local government and commonwealth-based businesses; provided that, for the purposes of government use, the commission’s examination shall include but not be limited to consideration of government records and delivery of services; court proceedings; statewide registries including for firearms, marijuana and opiates and election nomination papers, voter records and election results; and provided further that, for the purposes of business use, the commission’s examination shall include but not be limited to consideration of the advisability of allowing corporate records to be maintained using blockchain technology, including any security requirements necessary to ensure their accuracy;

(b) The need for modifications to the definition of blockchain in this act and to general law to effect the appropriate deployment of blockchain technology;

(c) The impact of the proliferation of the virtual currency industry on state revenues and the need to restructure the commonwealth’s tax framework, including the advisability of taxing virtual currency transactions as part of the sales tax;

(d) The advisability of government agencies and relevant business enterprises, including but not limited to cannabis retail stores, accepting payment in virtual currency;

(e) The feasibility of regulating the energy consumption associated with virtual currency;

(f) The consumer protection activities necessary to provide safeguards and offer technological literacy to Massachusetts residents, including but not limited to the advisability of licensure requirements;

(g) The best practices for enabling blockchain technology to benefit the commonwealth, Massachusetts-based businesses, and Massachusetts residents, including an examination of historical barriers to entry and participation in emerging technologies and markets for individuals underrepresented in these industries and markets;

(h) The state agencies best equipped to provide oversight of blockchain technology and the virtual currency industry, including with respect to consumer protection; and

(i) Any other related topic which the commission may choose to examine in relation to blockchain technology.

The commission shall take input from a broad range of stakeholders with a diverse range of interests affected by state policies governing emerging technologies, privacy, business, finance, the courts, the legal community, and state and local government.

(4) Not later than one year after all appointments to the commission have been made pursuant to section 3 of this act, the commission shall report to the general court the result of its investigation and its master plan of recommendations to foster a positive blockchain technology environment, together with drafts of legislation necessary to effect its recommendations, by filing the same with the clerk of the house of representatives and the clerk of the senate.

SECTION 4. This act shall take effect upon its passage.

Massachusetts S 707

Certain Virtual Currencies

2025 MA S 707

Massachusetts S 707

Certain Virtual Currencies

2025 MA S 707