Title 19
Financial Institutions

Chapter 14.3
Currency Transmissions

§ 19-14.3-3.11. Prevention of fraudulent activity.

All virtual currency kiosk operators shall 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 department of business regulation may request evidence from a virtual currency kiosk operator relating to its current use of blockchain analytics.

(1) 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 anti-fraud procedures, controls, and monitoring mechanisms.

(2) Each virtual currency kiosk operator shall designate and employ a compliance officer in accordance with the following requirements:

(i) The compliance officer shall be qualified to coordinate and monitor compliance with any virtual currency business activity transacted in this state pursuant to this chapter and all other applicable federal and state laws, rules, and regulations;

(ii) The compliance officer shall be employed full-time by the virtual currency kiosk operator; and

(iii) The compliance officer shall not be an individual who owns more than a twenty percent (20%) interest of the virtual currency kiosk operator by whom the individual is employed.

(3) Upon request of the customer, a virtual currency kiosk operator shall issue a refund to a new customer for the full amount of all transactions made within the thirty-day (30) new customer time period as provided in the definition of “new customer” in § 19-14.3-1.1. In order to receive a refund under this subsection, a new customer shall have been fraudulently induced to engage in the virtual currency transaction(s) and shall contact the virtual currency kiosk operator and a government or law enforcement agency to inform them of the fraudulent nature of the transaction(s) within ninety (90) days of the last transaction to occur during the thirty-day (30) new customer time period.

(4) A virtual currency kiosk operator shall 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 subsection, an existing customer shall have been fraudulently induced to engage in the virtual currency transaction(s) and shall contact the virtual currency kiosk operator and a government or law enforcement agency to inform them of the fraudulent nature of the transaction(s) within ninety (90) days of each transaction.