On March 9, the Connecticut Department of Banking summarily suspended a virtual currency kiosk operator’s money transmission license and issued a temporary cease and desist order after an investigation found purported widespread violations of the state’s Money Transmission Act and virtual currency kiosk statutes. The department ordered the operator to make restitution and disgorge improperly collected fees, and signaled the state’s intent to permanently revoke the operator’s license and impose civil penalties of up to $100,000 per violation. According to the order, the department found the operator had charged transaction fees exceeding the 15 percent statutory cap — purportedly collecting excess fees from over 500 consumers across more than 1,000 transactions between October 2024 and July 2025 — and failed to maintain the minimum tangible net worth or evidence of such required under state law from 2022 to 2025.

The department also found that the operator’s kiosks facilitated consumer scams in which affected consumers purportedly lost tens of thousands of dollars, and failed to comply with Connecticut laws requiring full refunds to new customers who report fraudulent transactions. The order further states that the operator: (i) failed to implement adequate anti-money laundering and know-your-customer controls; (ii) allowed transactions exceeding daily statutory limits; and (iii) failed to provide mandatory disclosures, warnings and receipts. The order scheduled a hearing for May 13. The department cited separate actions against the operator in Maine (covered by InfoBytes here), Florida, Iowa, and Minnesota for various licensing and consumer protection violations.