HB 6077

HOUSE BILL NO. 6077
A bill to prohibit the operation of virtual currency kiosks;
to provide for the powers and duties of certain state governmental officers and
entities; to prescribe penalties; and to provide remedies.
the people of the state of michigan enact:
Sec. 1. This act may be
cited as the "virtual currency kiosk prevention act".
Sec. 3. As used in this
act:
(a) "Charges" means either of the following:
(i)
Fees or expenses paid by a user to an operator as compensation for the
operator's facilitation of a virtual currency transaction.
(ii)
The difference between the market price of a virtual currency that is
purchased, sold, transferred, or exchanged by a user in a virtual currency
transaction and the price of the virtual currency that is charged to the user
by the operator.
(b) "Money" means a medium of exchange authorized or
adopted by the United States or a foreign government as a part of its currency
that is customarily used and accepted as a medium of exchange in the country of
issuance. The term includes a monetary unit of account established by an
intergovernmental organization or by agreement between 2 or more governments.
(c) "Operate" means to remotely conduct or
facilitate a virtual currency transaction through a virtual currency kiosk on
behalf of and for compensation by the user of the virtual currency kiosk in the
form of charges assessed to the user.
(d) "Operator" means a person that owns or engages
in the business of operating a virtual currency kiosk, regardless of whether
the person provides custodial or noncustodial services with regard to virtual
currency.
(e) "Person" means an individual or a partnership,
corporation, limited liability company, association, governmental entity, or
other legal entity.
(f) "User" means an individual who initiates a
virtual currency transaction through a virtual currency kiosk for the purpose
of the individual's purchase, sale, transfer, or exchange of virtual currency.
(g) "Virtual currency" means a natively electronic
asset that confers economic, proprietary, or access rights or powers and is
recorded using cryptographically secured distributed ledger technology or an
analogous technology.
(h) "Virtual currency kiosk" means an electronic
terminal that enables the operator of the electronic terminal to conduct or
facilitate a virtual currency transaction on behalf of a third party. Virtual
currency kiosk includes, but is not limited to, an electronic terminal that
does either of the following:
(i)
Connects to a separate virtual currency exchange that performs the virtual
currency transaction.
(ii)
Draws on virtual currency that is in the possession of the operator.
(i) "Virtual currency transaction" means a
transaction conducted through a virtual currency kiosk that involves either of
the following:
(i)
An exchange of virtual currency for money, bank credit, or another form of
virtual currency.
(ii)
An exchange of money or bank credit for virtual currency.
(j) "Vulnerable adult" means
that term as defined in section 3 of the financial exploitation prevention act,
2020 PA 344, MCL 487.2083.
Sec. 5. (1) A person shall
not intentionally, knowingly, or recklessly operate
a virtual currency kiosk in this state.
(2) A person shall not intentionally,
knowingly, or recklessly
allow a virtual currency kiosk to be operated on any premises that the
person owns, leases, or controls in this state.
Sec. 7. (1) A person that
violates section 5 is guilty of a felony punishable
as follows:
(a) Except as provided in
subdivision (b), by 1 or more of the following:
(i)
Imprisonment for not more than 5 years.
(ii) A
fine of not more than $50,000.00 or 3 times the amount of any transactions
conducted due to the violation, whichever is greater.
(iii)
Not more than 500 hours of community service.
(b) If the violation involves a virtual
currency transaction conducted by a vulnerable adult, results in aggregate
financial losses that exceed $50,000.00, or involves a pattern of organized
fraudulent activity, by 1 or more of the following:
(i)
Imprisonment for not more than 10 years.
(ii) A
fine of not more than $100,000.00 or 3 times the amount of any transactions
conducted due to the violation, whichever is greater.
(iii)
Not more than 500 hours of community service.
(2) The attorney general or a county
prosecutor may bring an action to enforce this act. The court in an
action brought under this subsection may order 1 or more of the following forms
of relief:
(a) An injunction against a violation of this act.
(b) An order requiring a person to pay a fine imposed under subsection (1).
(c) An order requiring a person that violated this act to
forfeit and pay to this state any charges that were collected by the person
during the period in which the person was in violation of this act.
(d) An order requiring a person that violated this act to
forfeit to this state any virtual currency kiosk that is owned by the person
and located in this state.
(e) An award to the attorney general or
county prosecutor of its costs associated with an investigation of a
violation of this act.
Enacting section 1.
This act takes effect 90 days after the date it is enacted into law.