8 V.S.A. chapter 79 — Money Services (MTMA with virtual-currency subchapter; kiosk rules § 2577), full text
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The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
Statutes›
Title 8›
Chapter 079›
Full Text
Title 8: Banking and Insurance
Chapter 079: Money Services
Subchapter 001: GENERAL PROVISIONS
§ 2500. Purpose
It is the intent of the General Assembly that the provisions of this chapter accomplish
the following:
(1) ensure the State can coordinate with other states in all areas of regulation, licensing,
and supervision to eliminate unnecessary regulatory burden and more effectively use
regulator resources;
(2) protect the public from financial crime;
(3) standardize the types of activities that are subject to licensing or otherwise exempt
from licensing; and
(4) modernize safety and soundness requirements to ensure customer funds are protected
in an environment that supports innovative and competitive business practices. (Added 2023, No. 110 (Adj. Sess.), § 39, eff. July 1, 2024.)
§ 2501. Transition period
(a) A person licensed under subchapter three of this chapter prior to July 1, 2024, and
their authorized delegates, shall not be subject to the provisions of this chapter
that establish new or different requirements from those that existed prior to July
1, 2024 until July 1, 2025.
(b) Notwithstanding subsection (a) of this section, on or before July 1, 2025 a licensee
shall amend its authorized delegate written contracts to comply with the requirements
in section 2525 of this chapter, provided the licensee and authorized delegate otherwise
operate in full compliance with this chapter pursuant to the timeline established
in subsection (a) of this section. (Added 2023, No. 110 (Adj. Sess.), § 39, eff. July 1, 2024.)
§ 2502. Relationship to federal law
(a) In the event state money transmission jurisdiction is conditioned on a federal law,
any inconsistencies between a provision of this chapter and the federal law governing
money transmission shall be governed by the applicable federal law to the extent of
the inconsistency.
(b) In the event of any inconsistencies between this chapter and a federal law that governs
pursuant to subsection (a) of this section, the Commissioner may provide interpretive
guidance that:
(1) identifies the inconsistency; and
(2) identifies the appropriate means of compliance with federal law. (Added 2023, No. 110 (Adj. Sess.), § 39, eff. July 1, 2024.)
§ 2503. Definitions
As used in this chapter:
(1) “Authorized delegate” means a person a licensee designates to engage in money transmission
on behalf of the licensee.
(2) “Average daily money transmission liability” means the amount of the licensee’s outstanding
money transmission obligations in this State at the end of each day in a given period
of time, added together, and divided by the total number of days in the given period
of time. For purposes of calculating average daily money transmission liability under
this chapter for any licensee required to do so, the given periods of time shall be
the quarters ending March 31, June 30, September 30, and December 31.
(3) “Bank Secrecy Act” means the Bank Secrecy Act, 31 U.S.C. § 5311 et seq. and its implementing regulations, as may be amended.
(4) “Check cashing” means receiving at least $500.00 compensation within a 30-day period
for taking payment instruments or stored value, other than traveler’s checks, in exchange
for money, payment instruments, or stored value delivered to the person delivering
the payment instrument or stored value at the time and place of delivery without any
agreement specifying when the person taking the payment instrument will present it
for collection.
(5) “Closed loop stored value” means stored value that is redeemable by the issuer only
for goods or services provided by the issuer or its affiliate or franchisees of the
issuer or its affiliate, except to the extent required by applicable law to be redeemable
in cash for its cash value.
(6) “Control of virtual currency,” when used in reference to a transaction or relationship
involving virtual currency, means the power to execute unilaterally or prevent indefinitely
a virtual currency transaction.
(7) “Currency exchange” means receipt of revenues equal to or greater than five percent
of total revenues from the exchange of money of one government for money of another
government.
(8) “Eligible rating” shall mean a credit rating of any of the three highest rating categories
provided by an eligible rating service, whereby each category may include rating category
modifiers such as “plus” or “minus” for S&P, or the equivalent for any other eligible
rating service. Long-term credit ratings are deemed eligible if the rating is equal
to A- or higher by S&P, or the equivalent from any other eligible rating service.
Short-term credit ratings are deemed eligible if the rating is equal to or higher
than A-2 or SP-2 by S&P, or the equivalent from any other eligible rating service.
In the event that ratings differ among eligible rating services, the highest rating
shall apply when determining whether a security bears an eligible rating.
(9) “Eligible rating service” shall mean any Nationally Recognized Statistical Rating
Organization (NRSRO) as defined by the U.S. Securities and Exchange Commission, and
any other organization designated by the Commissioner by rule or order.
(10) “In this State” means at a physical location within Vermont for a transaction requested
in person. For a transaction requested electronically or by phone, the provider of
money transmission may determine if the person requesting the transaction is “in this
State” by relying on other information provided by the person regarding the location
of the individual’s residential address or a business entity’s principal place of
business or other physical address location, and any records associated with the person
that the provider of money transmission may have to indicate such location, including
an address associated with an account.
(11) “Licensee” means a person licensed under this chapter.
(12) “Limited station” means private premises where a check casher is authorized to engage
in check cashing for not more than two days of each week solely for the employees
of the particular employer or group of employers specified in the check casher license
application.
(13) “Mobile location” means a vehicle or a movable facility where check cashing occurs.
(14) “Monetary value” means a medium of exchange, whether or not redeemable in money.
(15) “Money” means a medium of exchange that is issued by the United States or a foreign
government. The term includes a monetary unit of account established by an intergovernmental
organization or by agreement between two or more governments.
(16) “Money services” means money transmission, check cashing, or currency exchange.
(17)(A) “Money transmission” means any of the following:
(i) selling or issuing payment instruments to a person located in this State;
(ii) selling or issuing stored value to a person located in this State; or
(iii) receiving money for transmission from a person located in this State.
(B) The term “money transmission” includes payroll processing services.
(C) The term “money transmission” does not include the provision solely of telecommunications
services or network access.
(18) “Money transmission kiosk” means an automated, unstaffed electronic machine that allows
users to engage in money transmission, including any machine that is capable of accepting
or dispensing cash in exchange for virtual currency. The term does not include consumer
cell phones and other similar personal devices.
(19)(A) “Outstanding money transmission obligations” shall be established and extinguished
in accordance with applicable state law and shall mean:
(i) any payment instrument or stored value issued or sold by the licensee to a person
located in the United States or reported as sold by an authorized delegate of the
licensee to a person that is located in the United States that has not yet been paid
or refunded by or for the licensee, or escheated in accordance with applicable abandoned
property laws; or
(ii) any money received for transmission by the licensee or an authorized delegate in the
United States from a person located in the United States that has not been received
by the payee or refunded to the sender, or escheated in accordance with applicable
abandoned property laws.
(B) For purposes of this section, “in the United States” shall include, to the extent
applicable, a person in any state, territory, or possession of the United States;
the District of Columbia; the Commonwealth of Puerto Rico; or a U.S. military installation
located in a foreign country.
(20) “Payment instrument” means a written or electronic check, draft, money order, traveler’s
check, or other written or electronic instrument for the transmission or payment of
money or monetary value, whether or not negotiable. The term does not include stored
value or any instrument that is:
(A) redeemable by the issuer only for goods or services provided by the issuer or its
affiliate or franchisees of the issuer or its affiliate, except to the extent required
by applicable law to be redeemable in cash for its cash value; or
(B) not sold to the public but issued and distributed as part of a loyalty, rewards, or
promotional program.
(21) “Payroll processing services” means receiving money for transmission pursuant to a
contract with a person to deliver wages or salaries, make payment of payroll taxes
to state and federal agencies, make payments relating to employee benefit plans, or
make distributions of other authorized deductions from wages or salaries. The term
does not include an employer performing payroll processing services on its own behalf
or on behalf of its affiliate.
(22) “Prevailing market value” means the value to buy or sell a particular virtual currency,
as applicable, quoted on a virtual currency exchange operated by a licensee based
in the United States, with sufficient volume to reflect the prevailing market price
of such virtual currency.
(23) “Receiving money for transmission” or “money received for transmission” means receiving
money or monetary value in the United States for transmission within or outside the
United States by electronic or other means.
(24) “Stored value” means monetary value representing a claim against the issuer evidenced
by an electronic or digital record, and that is intended and accepted for use as a
means of redemption for money or monetary value, or payment for goods or services.
The term includes “prepaid access” as defined by 31 C.F.R. § 1010.100, as may be amended. Notwithstanding the foregoing, the term “stored value” does not
include a payment instrument or closed loop stored value, or stored value not sold
to the public but issued and distributed as part of a loyalty, rewards, or promotional
program.
(25) “Tangible net worth” means the aggregate assets of a licensee excluding all intangible
assets, less liabilities, as determined in accordance with United States generally
accepted accounting principles.
(26) “U.S. dollar equivalent of virtual currency” means the prevailing market value of
a particular virtual currency in United States dollars for a particular date or period
specified in this chapter.
(27)(A) “Virtual currency” means a digital representation of value that:
(i) is used as a medium of exchange, unit of account, or store of value; and
(ii) is not money, whether or not denominated in money.
(B) The term “virtual currency” does not include:
(i) a digital representation of value that can be redeemed for goods, services, discounts,
or purchases solely as part of a customer affinity or rewards program with the issuing
merchant or other designated merchants, or both, or can be redeemed for digital units
in another customer affinity or rewards program, but cannot be, directly or indirectly,
converted into, redeemed, or exchanged for money, monetary value, bank credit, or
virtual currency; or
(ii) a digital representation of value issued by or on behalf of a publisher and used solely
within an online game, game platform, or family of games sold by the same publisher
or offered on the same game platform, and:
(I) has no market or application outside of such online game, game platform, or family
of games;
(II) cannot be, directly or indirectly, converted into, redeemed, or exchanged for money,
monetary value, bank credit, or virtual currency; and
(III) may or may not be redeemable for real-world goods, services, discounts, or purchases.
(28) “Virtual-currency administration” means:
(A) issuing virtual currency with the authority to redeem such virtual currency for money,
monetary value, bank credit, or other virtual currency; or
(B) issuing virtual currency that entitles the purchaser or holder of such virtual currency,
or otherwise conveys or represents a right of the purchaser or holder of such virtual
currency, to redeem such virtual currency for money, monetary value, bank credit,
or other virtual currency.
(29) “Virtual-currency business activity” means:
(A) exchanging or transferring virtual currency, engaging in virtual-currency administration,
or engaging in virtual-currency storage, in each case whether directly or through
an agreement with a virtual-currency control-services vendor;
(B) holding electronic precious metals or electronic certificates representing interests
in precious metals on behalf of another person or issuing shares or electronic certificates
representing interests in precious metals;
(C) buying or selling virtual currency as a consumer business; or
(D) receiving virtual currency or control of virtual currency for transmission or transmitting
virtual currency, except where the transaction is undertaken for nonfinancial purposes
and does not involve the transfer of more than a nominal amount of virtual currency.
(30) “Virtual-currency control-services vendor” means a person that has control of virtual
currency solely under an agreement with a person that, on behalf of another person,
assumes control of virtual currency.
(31) “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.
(32) “Virtual-currency storage” means:
(A) maintaining possession, custody, or control over virtual currency on behalf of another
person, including as a virtual-currency control-services vendor;
(B) issuing, transferring, or otherwise granting or providing to any person in this State
any claim or right, or any physical, digital, or electronic instrument, receipt, certificate,
or record representing any claim or right to receive, redeem, withdraw, transfer,
exchange, or control any virtual currency or amount of virtual currency; or
(C) receiving possession, custody, or control over virtual currency from a person in this
State, in return for a promise or obligation to return, repay, exchange, or transfer
such virtual currency or a like amount of such virtual currency. (Added 2023, No. 110 (Adj. Sess.), § 39, eff. July 1, 2024.)
§ 2504. Exemptions
This chapter does not apply to:
(1) An operator of a payment system to the extent that it provides processing, clearing,
or settlement services, between or among persons exempted by this section or licensees,
in connection with wire transfers, credit card transactions, debit card transactions,
stored-value transactions, automated clearing house transfers, or similar funds transfers.
(2) A person appointed as an agent of a payee to collect and process a payment from a
payor to the payee for goods or services, other than money transmission itself, provided
to the payor by the payee, provided that:
(A) there exists a written agreement between the payee and the agent directing the agent
to collect and process payments from payors on the payee’s behalf;
(B) the payee holds the agent out to the public as accepting payments for goods or services
on the payee’s behalf; and
(C) payment for the goods and services is treated as received by the payee upon receipt
by the agent so that the payor’s obligation is extinguished and there is no risk of
loss to the payor if the agent fails to remit the funds to the payee.
(3) A person that acts as an intermediary by processing payments between an entity that
has directly incurred an outstanding money transmission obligation to a sender, and
the sender’s designated recipient, provided that the entity:
(A) is properly licensed or exempt from licensing requirements under this chapter;
(B) provides a receipt, electronic record, or other written confirmation to the sender
identifying the entity as the provider of money transmission in the transaction; and
(C) bears sole responsibility to satisfy the outstanding money transmission obligation
to the sender, including the obligation to make the sender whole in connection with
any failure to transmit the funds to the sender’s designated recipient.
(4) The United States or a department, agency, or instrumentality thereof, or its agent.
(5) Money transmission by the U.S. Postal Service or by an agent of the U.S. Postal Service.
(6) A state, county, city, or any other governmental agency or governmental subdivision
or instrumentality of a state, or its agent.
(7) A financial institution as defined in subdivision 11101(32) of this title, or a credit union, provided their deposits are federally insured.
(8) A financial institution holding company as defined in subdivision 11101(33) of this title; an office of an international banking corporation; a foreign bank that establishes
a federal branch pursuant to the International Bank Act, 12 U.S.C. § 3102, as may be amended; a corporation organized pursuant to the Bank Services Company
Act, 12 U.S.C. §§ 1862–1867, as may be amended; a corporation organized under the Edge Act, 12 U.S.C. §§ 611– 633, as may be amended; an independent trust company organized under chapter 77 of this
title; or a special purpose financial institution that is organized under the laws
of this State.
(9) Electronic funds transfer of governmental benefits for a federal, state, county, or
governmental agency by a contractor on behalf of the United States or a department,
agency, or instrumentality thereof, or on behalf of a state or governmental subdivision,
agency, or instrumentality thereof.
(10) A board of trade designated as a contract market under the federal Commodity Exchange
Act, 7 U.S.C. §§ 1–25, as may be amended, or a person that, in the ordinary course of business, provides
clearance and settlement services for a board of trade to the extent of its operation
as or for such a board.
(11) A registered futures commission merchant under the federal commodities laws to the
extent of its operation as such a merchant.
(12) A person registered as a securities broker-dealer under federal or state securities
laws to the extent of its operation as such a broker-dealer.
(13) An individual employed by a licensee, authorized delegate, or any person exempted
from the licensing requirements of this chapter when acting within the scope of employment
and under the supervision of the licensee, authorized delegate, or exempted person
as an employee and not as an independent contractor.
(14) A person expressly appointed as a third-party service provider to or agent of an entity
exempt under subdivision (7) of this section, solely to the extent that:
(A) such service provider or agent is engaging in money transmission on behalf of and
pursuant to a written agreement with the exempt entity that sets forth the specific
functions that the service provider or agent is to perform; and
(B) the exempt entity assumes all risk of loss and all legal responsibility for satisfying
the outstanding money transmission obligations owed to purchasers and holders of the
outstanding money transmission obligations upon receipt of the purchaser’s or holder’s
money or monetary value by the service provider or agent.
(15) The sale or issuance of stored value by a public or nonprofit school to its students
and employees.
(16) A debt adjuster licensed pursuant to chapter 133 of this title when engaged in the
business of debt adjustment.
(17) A person exempt by rule or order if the Commissioner finds such exemption to be in
the public interest and that the regulation of such person is not necessary for the
purposes of this chapter.
(18) A person that performs payroll calculations, prepares payroll instructions, prepares
and files State or federal income withholding tax reports and unemployment insurance
compensation reports, or provides other payroll-related services, but that does not
engage in the business of payroll processing services or otherwise engage in the business
of money transmission in this State or other acts requiring a license under this chapter.
(19) A person that does not provide payroll processing services to any employer that has
its principal place of business in this State and that does not otherwise engage in
the business of money transmission in this State or other acts requiring a license
under this chapter.
(20) A person that:
(A) provides payroll processing services to 25 or fewer employers that have their principal
place of business in this State;
(B) provides payroll processing services to 500 or fewer employers, regardless of where
the principal place of business of each employer is located;
(C) provides payroll processing services involving transmission to fewer than 300 Vermont
resident employees, regardless of where the principal place of business of their employer
is located;
(D) has not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic,
foreign, or military court, and no key individual or person in control of such person
has been convicted of, or pled guilty or nolo contendere to, a felony in a domestic,
foreign, or military court;
(E) has never had a financial services license or professional license revoked in any
jurisdiction and no key individual or person in control of such person has ever had
a financial services license or professional license revoked in any jurisdiction,
except that a subsequent formal vacation of such revocation shall not be deemed a
revocation;
(F) does not otherwise engage in the business of money transmission in this State or other
acts requiring a license under this chapter; and
(G) receives and holds all money or monetary value received for transmission exclusively
in:
(i) segregated trust accounts with federally insured financial institutions or credit
unions for the benefit of its employer customers or applicable governmental authorities,
such that the funds in such accounts are not subject to claims or liens of its creditors;
or
(ii) deposit accounts at federally insured financial institutions or credit unions that
are both titled in the name and tax identification number of the financial institution
or credit union and for the benefit of the person’s customers. (Added 2023, No. 110 (Adj. Sess.), § 39, eff. July 1, 2024; amended 2025, No. 23, § 15, eff. July 1, 2025.)
§ 2504a. Authority to require demonstration of exemption
The Commissioner may require that any person claiming to be exempt from licensing
pursuant to section 2504 of this chapter provide information and documentation to
the Commissioner demonstrating that it qualifies for any claimed exemption. (Added 2023, No. 110 (Adj. Sess.), § 39, eff. July 1, 2024.)
Subchapter 002: MONEY TRANSMISSION LICENSES
§ 2505. License required
(a) A person shall not engage in the business of money transmission or advertise, solicit,
or hold itself out as providing money transmission, unless the person is licensed
under this subchapter.
(b) Subsection (a) of this section does not apply to:
(1) a person that is an authorized delegate of a person licensed under this subchapter
acting within the scope of authority conferred by a written contract with the licensee;
or
(2) a person that is exempt pursuant to section 2504 of this chapter and does not engage
in money transmission outside the scope of such exemption. (Added 2023, No. 110 (Adj. Sess.), § 40, eff. July 1, 2024.)
§ 2506. Application for license; additional information
(a) In addition to the information required by section 2102 of this title, an application for a license under this subchapter shall state or contain:
(1) a description of any money services previously provided by the applicant and the money
services that the applicant seeks to provide in this State;
(2) a list of the applicant’s proposed authorized delegates and the locations in Vermont
where the applicant and its authorized delegates propose to engage in money transmission
or provide other money services;
(3) a list of other states in which the applicant is licensed to engage in money transmission
or provide other money services;
(4) information concerning any bankruptcy or receivership proceedings affecting the licensee
or a person in control of a licensee;
(5) a sample form of contract for authorized delegates, if applicable;
(6) a sample form of payment instrument or instrument upon which stored value is recorded,
as applicable; and
(7) the name and address of any financial institution through which the applicant plans
to conduct money services.
(b) For good cause shown and consistent with the purposes of this section, the Commissioner
may waive one or more requirements of this section or permit an applicant to submit
substituted information in lieu of the required information. (Added 2023, No. 110 (Adj. Sess.), § 40, eff. July 1, 2024.)
§ 2507. Money transmission kiosk registration
(a) A licensee shall not locate, or allow a third party to locate, a money transmission
kiosk in this State that allows users of the money transmission kiosk to engage in
money transmission through the licensee unless the licensee registers the money transmission
kiosk and obtains the prior approval of the Commissioner for its activation.
(b) To apply for registration and approval to activate a money transmission kiosk, a licensee
shall submit an application, using a form prescribed by the Commissioner, that includes
the ownership and location of the money transmission kiosk, an affidavit of all businesses
and services to be offered at the kiosk, the written agreement between the licensee
and the owner of the money transmission kiosk if different persons, and the text of
each disclosure required pursuant to subsection (c) of this section along with a description
of the form, timing, and location for each disclosure.
(c) Each money transmission kiosk shall disclose prominently and conspicuously, using
as high a contrast or resolution as any other display or graphics on the money transmission
kiosk, prior to the point at which a user of the money transmission kiosk is irrevocably
committed to completing any transaction:
(1) on or at the location of the money transmission kiosk, or on the first screen of such
kiosk, 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;
and
(2) on the screen of the money transmission kiosk:
(A) for a transaction that does not involve virtual currency, the amount of the fees or
charges that will be assessed to the user of the money transmission kiosk for the
transaction by the licensee and by the owner of the money transmission kiosk, a clear
explanation of who is imposing each fee or charge and that such fees and charges are
in addition to any fees or charges that may be imposed by other entities relevant
to the particular transaction, and the method by which the user may cancel the transaction
to avoid the imposition of fees or charges; and
(B) for a transaction that involves virtual currency, all disclosures required pursuant
to subsection 2574(c) of this chapter, a clear explanation of who is imposing each
consideration to be charged for the transaction, and that such consideration is in
addition to any fees or charges that may be imposed by other entities relevant to
the particular transaction, and the method by which the user may cancel the transaction
to avoid the imposition of the consideration and other fees or charges.
(d) Any alterations in the form, content, timing, or location of previously approved disclosures
must be submitted to and approved by the Commissioner prior to their adoption and
use.
(e) To ensure adequate consumer protection, the Commissioner may by rule or order specify
additional minimum disclosure standards for money transmission kiosks, including the
form, content, timing, and location of such disclosures.
(f) Immediately following the completion of each transaction, each money transmission
kiosk shall provide the user of the money transmission kiosk with a receipt that is
compliant with sections 2562 and 2574 of this chapter as applicable to the particular
transaction. (Added 2023, No. 110 (Adj. Sess.), § 40, eff. July 1, 2024.)
Subchapter 003: CHECK CASHING AND CURRENCY EXCHANGE LICENSES
§ 2515. Check cashing and currency exchange license required
(a) A person shall not engage in check cashing and currency exchange, or hold itself out
as providing these money services, unless the person is licensed under this chapter.
(b) Subsection (a) of this section shall not apply to:
(1) a person licensed under subchapter 2 of this chapter;
(2) an authorized delegate of a person licensed under subchapter 2 of this chapter if
such money services are within the scope of authority conferred by a written contract
between the authorized delegate and the licensee; or
(3) a person that is exempt pursuant to section 2504 of this chapter and that does not
engage in money services outside the scope of such exemption. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2023, No. 110 (Adj. Sess.), § 41, eff. July 1, 2024.)
§ 2516. Application for license; additional information
In addition to the information required by section 2102 of this title, an application for a license under this subchapter shall state or contain:
(1) the complete addresses of locations in this State where the applicant proposes to
engage in check cashing or currency exchange, including all limited stations and mobile
locations; and
(2) a description of the source of money and credit to be used by the applicant to engage
in check cashing services and currency exchange. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2011, No. 78 (Adj. Sess.), § 16, eff. April 2, 2012; 2019, No. 20, § 46.)
§ 2517. Repealed. 2019, No. 20, § 47.
§ 2518. Repealed. 2019, No. 20, § 48.
§ 2519. Activities of check cashers and currency exchanges
(a) Check cashing.
(1) A licensee, in every location conducting business under a license issued pursuant
to this chapter, shall conspicuously post and at all times display a notice stating
all fees charged. A licensee shall file with the Commissioner a statement of the fees
charged at every location licensed for services offered there.
(2) Before a licensee shall deposit, with any financial institution, a payment instrument
that is cashed by a licensee, each such item shall be endorsed with the actual name
under which such licensee is doing business. Additionally, the words “Licensed Check
Cashing Business” must be written legibly or stamped immediately after or below the
name of the endorser.
(3) A licensee shall comply with all applicable federal statutes governing currency transaction
reporting.
(4) A licensee may not alter or delete any information on any payment instrument cashed.
(5) A licensee shall issue a receipt for each check cashing transaction upon request.
The receipt shall include, among other matters the licensee may desire to include,
the amount of the payment instrument and the total fee charged.
(6) A licensee shall not impose any fee or other charge for bad checks other than as expressly
permitted under the provisions of 9 V.S.A. §§ 2311 and 2312.
(7) Within 10 business days after being advised by the payor financial institution that
a payment instrument has been altered, forged, stolen, obtained through fraudulent
or illegal means, negotiated without proper legal authority, or represents the proceeds
of illegal activity, the licensee shall notify the police department in the city or
town where the payment instrument was cashed. If a payment instrument is returned
to the licensee by the payor financial institution for any of the aforementioned reasons,
the licensee may not release or destroy the payment instrument without the consent
of the city or town police department, or other investigative law enforcement authority.
(8) No licensee shall issue coupons, gift certificates, or tokens to be used in lieu of
money when cashing a payment instrument.
(9) No licensee shall require the customer to receive payment by a method that causes
the customer to pay additional or further fees and charges to the licensee or other
person, and no licensee shall charge or receive any other charges or fees in addition
to the fees listed in this chapter.
(10) A licensee shall pay to every customer tendering a payment instrument to be cashed
the entire face amount of such instrument in cash, less any charges permitted by this
section, on the same date upon which such instrument is presented to the licensee.
(11) A licensee is prohibited from requiring that a customer cash two or more separate
checks in a manner to avoid the limitations on the fees as set forth in this section.
(12) No check casher shall:
(A) charge check cashing fees, except as otherwise provided in this chapter, in excess
of five percent of the face amount of the payment instrument or $5.00, whichever is
greater;
(B) charge check cashing fees in excess of three percent of the face amount of the payment
instrument, or $2.00, whichever is greater, if such payment instrument is the payment
of any kind of state public assistance or federal Social Security benefit, if the
customer cashing the payment instrument is the named payee of such payment instrument;
or
(C) charge check cashing fees for personal checks or money orders in excess of 10 percent
of the face amount of the personal check or money order or $5.00, whichever is less.
(13) No licensee shall agree to hold a payment instrument for later deposit. No licensee
shall cash or advance any money on a postdated payment instrument.
(14) Licensees may charge a customer with a one-time membership fee not to exceed $10.00.
(b) Currency exchange.
(1) The rate of exchange and fees charged by a licensee for rendering currency exchange
services shall be prominently displayed to the public at each business location.
(2) Licensees shall provide each customer with a written receipt sufficient to identify
the transaction, the licensee, the rate of exchange, the fees charged, and the amount
of currency exchanged. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002.)
§ 2520. Applicability of subchapters
The following subchapters of this chapter shall not apply to persons licensed under
this subchapter: subchapter 4 (authorized delegates of money transmitters), subchapter
5 (reporting and records for money transmitters), subchapter 6 (prudential standards
for money transmitters), subchapter 9 (timely transmission, refunds, and disclosures
by money transmitters), and subchapter 10 (virtual currency). (Added 2023, No. 110 (Adj. Sess.), § 41, eff. July 1, 2024.)
Subchapter 004: AUTHORIZED DELEGATES OF MONEY TRANSMITTERS
§ 2525. Relationship between licensee and authorized delegate
(a) As used in this subchapter, “remit” means to make direct payments of money to a licensee
or its representative authorized to receive the money, or to deposit the money in
an entity identified as exempt under subdivision 2504(7) of this chapter, in an account
specified by the licensee.
(b) Before a licensee is authorized to conduct business through an authorized delegate
or allows a person to act as the licensee’s authorized delegate, the licensee shall:
(1) adopt, and update as necessary, written policies and procedures reasonably designed
to ensure that the licensee’s authorized delegates comply with applicable state and
federal law;
(2) enter into a written contract that complies with subsection (d) of this section; and
(3) conduct a reasonable risk-based background investigation sufficient for the licensee
to determine whether the authorized delegate has complied and will likely comply with
applicable state and federal law.
(c) An authorized delegate must operate in full compliance with this chapter.
(d) The written contract required by subsection (b) of this section must be signed by
the licensee and the authorized delegate and, at a minimum, shall:
(1) appoint the person signing the contract as the licensee’s authorized delegate with
the authority to conduct money transmission on behalf of the licensee;
(2) set forth the nature and scope of the relationship between the licensee and the authorized
delegate and the respective rights and responsibilities of the parties;
(3) require the authorized delegate to agree to fully comply with all applicable state
and federal laws, rules, and regulations pertaining to money transmission, including
this chapter and rules implementing this chapter, relevant provisions of the Bank
Secrecy Act and the USA PATRIOT Act;
(4) require the authorized delegate to remit and handle money and monetary value in accordance
with the terms of the contract between the licensee and the authorized delegate;
(5) impose a trust on money and monetary value net of fees received for money transmission
for the benefit of the licensee;
(6) require the authorized delegate to prepare and maintain records as required by this
chapter or rules implementing this chapter, or as reasonably requested by the Commissioner;
(7) acknowledge that the authorized delegate consents to examination or investigation
by the Commissioner;
(8) state that the licensee is subject to regulation by the Commissioner and that, as
part of that regulation, the Commissioner may suspend or revoke an authorized delegate
designation or require the licensee to terminate an authorized delegate designation;
and
(9) acknowledge receipt of the written policies and procedures required under subsection
(b) of this section.
(e) If the licensee’s license is suspended, revoked, terminated, nonrenewed, surrendered
or expired, the licensee must, within five business days, provide documentation to
the Commissioner that the licensee has notified all applicable authorized delegates
of the licensee whose names are in a record filed with the Commissioner of the suspension,
revocation, termination, nonrenewal, surrender, or expiration of a license. Upon suspension,
revocation, termination, nonrenewal, or surrender of a license, applicable authorized
delegates shall immediately cease to provide money transmission as an authorized delegate
of the licensee.
(f) An authorized delegate of a licensee holds in trust for the benefit of the licensee
all money net of fees received from money transmission. If any authorized delegate
commingles any funds received from money transmission with any other funds or property
owned or controlled by the authorized delegate, all commingled funds and other property
shall be considered held in trust in favor of the licensee in an amount equal to the
amount of money net of fees received from money transmission.
(g) An authorized delegate shall not use a subdelegate to conduct money transmission on
behalf of a licensee. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2009, No. 134 (Adj. Sess.), § 22; 2023, No. 110 (Adj. Sess.), § 42, eff. July 1, 2024.)
§ 2526. Unauthorized activities
A person shall not engage in the business of money transmission on behalf of a person
not licensed under subchapter 2 of this chapter or not exempt pursuant to subchapter
1 of this chapter. A person that engages in such activity provides money transmission
to the same extent as if the person were a licensee and shall be jointly and severally
liable with the unlicensed or nonexempt person. (Added 2023, No. 110 (Adj. Sess.), § 42, eff. July 1, 2024.)
§ 2527. Termination or suspension of authorized delegate activity
(a) The authority granted to the Commissioner over licensees in section 2110 of this title applies equally to authorized delegates.
(b) The Commissioner may issue an order suspending or barring any authorized delegate
or any key individual or person in control of such authorized delegate from continuing
to be or becoming an authorized delegate of any licensee during the period for which
such orders are in effect or may order that an authorized delegate cease and desist
in any specified conduct.
(c) Upon issuance of a suspension or bar order, the licensee shall terminate its relationship
with such authorized delegate according to the terms of the order. (Added 2023, No. 110 (Adj. Sess.), § 42, eff. July 1, 2024.)
§ 2528. Private actions against authorized delegates
(a) Distinct from the Commissioner’s authority over licensees and authorized delegates,
any court in this State with jurisdiction over a private civil action brought by a
licensee against an authorized delegate shall have the ability to grant appropriate
equitable or legal relief, including prohibiting the authorized delegate from directly
or indirectly acting as an authorized delegate for any licensee in this State and
the payment of restitution, damages, or other monetary relief, if the court finds
that an authorized delegate failed to remit money in accordance with the written contract
required by subsection 2525(b) of this chapter or as otherwise directed by the licensee
or required by law.
(b) If the court issues an order prohibiting a person from acting as an authorized delegate
for any licensee pursuant to subsection (a) of this section, the licensee that brought
the action shall report the order to the Commissioner within 30 days and shall report
the order through NMLS within 90 days. (Added 2023, No. 110 (Adj. Sess.), § 42, eff. July 1, 2024.)
Subchapter 005: REPORTING AND RECORDS FOR MONEY TRANSMITTERS
§ 2530. Report of condition
(a) Each licensee shall submit a report of condition within 45 days of the end of the
calendar quarter, or within any extended time as the Commissioner may prescribe.
(b) The report of condition shall include:
(1) Financial information at the licensee level.
(2) Nationwide and state-specific money transmission transaction information in every
jurisdiction in the United States where the licensee is licensed to engage in money
transmission.
(3) A permissible investments report.
(4) Transaction destination country reporting for money received for transmission, if
applicable.
(5) Any other information the Commissioner reasonably requires with respect to the licensee.
The Commissioner is authorized and encouraged to use NMLS for the submission of the
report required by this section.
(c) The information required by subdivision (b)(4) of this section shall only be included
in a report of condition submitted within 45 days after the end of the fourth calendar
quarter. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
§ 2531. Audited financials
(a) Each licensee shall, within 90 days after the end of each fiscal year, or within any
extended time as the Commissioner may prescribe, file with the Commissioner:
(1) an audited financial statement of the licensee for the fiscal year prepared in accordance
with U.S. generally accepted accounting principles; and
(2) any other information as the Commissioner may reasonably require.
(b) The audited financial statements shall be prepared by an independent certified public
accountant or independent public accountant who is satisfactory to the Commissioner.
(c) The audited financial statements shall include or be accompanied by a certificate
of opinion of the independent certified public accountant or independent public accountant
that is satisfactory in form and content to the Commissioner. If the certificate or
opinion is qualified, the Commissioner may order the licensee to take any action as
the Commissioner may find necessary to enable the independent or certified public
accountant or independent public accountant to remove the qualification. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
§ 2532. Authorized delegate reporting
(a) Each licensee shall submit a report of authorized delegates within 45 days after the
end of the calendar quarter. The Commissioner is authorized and encouraged to use
NMLS for the submission of the report required by this section provided that such
functionality is consistent with the requirements of this section.
(b) The authorized delegate report shall include, at a minimum, each authorized delegate’s:
(1) company legal name;
(2) taxpayer employer identification number;
(3) principal provider identifier;
(4) physical address;
(5) mailing address;
(6) any business conducted in other states;
(7) any fictitious or trade name;
(8) contact person name, phone number, and email;
(9) start date as licensee’s authorized delegate;
(10) end date acting as licensee’s authorized delegate, if applicable;
(11) any administrative, civil, or criminal order against an authorized delegate concerning
their activity as an authorized delegate; and
(12) any other information the Commissioner reasonably requires with respect to the authorized
delegate. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
§ 2533. Change of authorized delegate
A licensee shall notify the Commissioner in writing within 30 days after any change
in the list of authorized delegates, identifying the name and street address of each
new authorized delegate and of each removed authorized delegate. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
§ 2534. Money laundering reports
A licensee and an authorized delegate shall file all reports required by federal currency
reporting, record keeping, and suspicious activity reporting requirements as set forth
in the Bank Secrecy Act and other federal and state laws pertaining to money laundering.
The timely filing of a complete and accurate report required under this section with
the appropriate federal agency is deemed compliance with the requirements of this
section. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
Subchapter 006: PRUDENTIAL STANDARDS FOR MONEY TRANSMITTERS
§ 2540. Net worth
(a) A licensee under this chapter shall maintain at all times a tangible net worth of
the greater of $100,000.00 or three percent of total assets for the first $100,000,000.00,
two percent of additional assets for $100,000,000.00 to $1,000,000,000.00, and 0.5
percent of additional assets for over $1,000,000,000.00.
(b) Tangible net worth must be demonstrated at initial application by the applicant’s
most recent audited or unaudited financial statements pursuant to subsection 2102(e) of this title.
(c) Notwithstanding subsections (a) and (b) of this section, the Commissioner for good
cause shown has the authority to exempt an applicant or licensee from the requirements
of this section, in part or in whole. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
§ 2541. Security
(a) An applicant for a money transmission license shall provide, and a licensee at all
times shall maintain, security consisting of a surety bond in a form satisfactory
to the Commissioner or, with the Commissioner’s approval, a deposit that meets the
requirements of this section.
(b) The amount of the required security shall be the greater of $100,000.00 or an amount
equal to one hundred percent of the licensee’s average daily money transmission liability
in this State calculated for the most recently completed three-month period, up to
a maximum of $2,000,000.00.
(c) A licensee that maintains a surety bond or deposit in the maximum amount provided
for in subsection (b) of this section shall not be required to calculate its average
daily money transmission liability in this State for purposes of this section.
(d) A licensee may exceed the maximum required surety bond or deposit amount pursuant
to subdivision 2543(a)(5) of this subchapter.
(e) The surety bond or deposit shall be payable to the State for use of the State and
for the benefit of any claimant against the licensee and its authorized delegates
to secure the faithful performance of the obligations of the licensee and its authorized
delegates with respect to money transmission.
(f) The aggregate liability on a surety bond may not exceed the principal sum of the bond.
A claimant against a licensee or its authorized delegate may maintain an action directly
against the bond, or the Commissioner may maintain an action on behalf of the claimant
against the bond. The power vested in the Commissioner by this subsection shall be
in addition to any other powers of the Commissioner under this chapter.
(g) The surety bond or deposit shall cover claims effective for as long as the Commissioner
specifies, but for at least five years after the licensee ceases to provide money
services in this State. However, the Commissioner may permit the amount of security
to be reduced or eliminated before the expiration of that time to the extent the amount
of the licensee’s outstanding money transmission obligations in this State is reduced. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
§ 2542. Maintenance of permissible investments
(a) A licensee shall maintain at all times permissible investments that have a market
value computed in accordance with U.S. generally accepted accounting principles of
not less than the aggregate amount of all of its outstanding money transmission obligations.
(b) Except for permissible investments enumerated in subsection 2543(a) of this subchapter,
the Commissioner, with respect to any licensee, may by rule or order limit the extent
to which a specific investment maintained by a licensee within a class of permissible
investments may be considered a permissible investment, if the specific investment
represents undue risk to customers, not reflected in the market value of investments.
(c) Permissible investments, even if commingled with other assets of the licensee, are
held in trust for the benefit of the purchasers and holders of the licensee’s outstanding
money transmission obligations upon the occurrence of one or more of the following
events:
(1) the insolvency of the licensee;
(2) the filing of a petition by or against the licensee under the U.S. Bankruptcy Code,
11 U.S.C. §§ 101–110, as may be amended, for bankruptcy or reorganization;
(3) the filing of a petition by or against the licensee for receivership;
(4) the commencement of any other judicial or administrative proceeding for its dissolution
or reorganization; or
(5) the commencement of an action by a creditor against the licensee who is not a beneficiary
of this statutory trust.
(d) No permissible investments impressed with a trust pursuant to subsection (c) of this
section shall be subject to attachment, levy of execution, or sequestration by order
of any court, except for a beneficiary of this statutory trust.
(e) Upon the establishment of a statutory trust in accordance with subsection (c) of this
section or when any funds are drawn on a letter of credit pursuant to subdivision
2543(a)(4) of this subchapter, the Commissioner shall notify the applicable regulator
of each state in which the licensee is licensed to engage in money transmission, if
any, of the establishment of the trust or the funds drawn on the letter of credit,
as applicable. Notice shall be deemed satisfied if performed pursuant to a multistate
agreement or through NMLS. Funds drawn on a letter of credit, and any other permissible
investments held in trust for the benefit of the purchasers and holders of the licensee’s
outstanding money transmission obligations, are deemed held in trust for the benefit
of such purchasers and holders on a pro rata and equitable basis in accordance with
statutes pursuant to which permissible investments are required to be held in this
State, and other states, as applicable. Any statutory trust established hereunder
shall be terminated upon extinguishment of all of the licensee’s outstanding money
transmission obligations.
(f) The Commissioner by rule or order may allow other types of investments that the Commissioner
determines are of sufficient liquidity and quality to be a permissible investment.
The Commissioner is authorized to participate in efforts with other state regulators
to determine that other types of investments are of sufficient liquidity and quality
to be a permissible investment. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
§ 2543. Types of permissible investments
(a) The following investments are permissible under section 2542 of this subchapter:
(1) Cash, including demand deposits, savings deposits, and funds in such accounts held
for the benefit of the licensee’s customers in an entity identified as exempt under
subdivision 2504(7) of this chapter, and cash equivalents, including ACH items in
transit to the licensee and ACH items or international wires in transit to a payee,
cash in transit via armored car, cash in smart safes, cash in licensee-owned locations,
debit card or credit card-funded transmission receivables owed by any bank, or money
market mutual funds rated “AAA” by S&P or the equivalent from any eligible rating
service.
(2) Certificates of deposit or senior debt obligations of an insured depository institution,
as defined in the Federal Deposit Insurance Act, 12 U.S.C. § 1813(c), as may be amended, or as defined under the federal Credit Union Act, 12 U.S.C. § 1781, as may be amended.
(3) An obligation of the United States or a commission, department, agency, or instrumentality
thereof; an obligation that is guaranteed fully as to principal and interest by the
United States; or an obligation of a state or a governmental subdivision, agency,
or instrumentality thereof.
(4) The full drawable amount of an irrevocable standby letter of credit for which the
stated beneficiary is the Commissioner that stipulates that the beneficiary need only
draw a sight draft under the letter of credit and present it to obtain funds up to
the letter of credit amount within seven days of presentation of the items required
by subdivision (a)(4)(C) of this section.
(A) The letter of credit shall:
(i) be issued by a financial institution as defined in subdivision 11101(32) of this title with federally insured deposits, a credit union with federally insured deposits,
a foreign bank that is authorized under federal law to maintain a federal agency or
federal branch office in a state or states, or a foreign bank that is authorized under
state law to maintain a branch in a state that:
(I) bears an eligible rating or whose parent company bears an eligible rating; and
(II) is regulated, supervised, and examined by federal or state authorities having regulatory
authority over banks, credit unions, and trust companies;
(ii) be irrevocable, unconditional, and indicate that it is not subject to any condition
or qualifications outside of the letter of credit;
(iii) not contain reference to any other agreements, documents, or entities, or otherwise
provide for any security interest in the licensee; and
(iv) contain an issue date and expiration date, and expressly provide for automatic extension,
without a written amendment, for an additional period of one year from the present
or each future expiration date, unless the issuer of the letter of credit notifies
the Commissioner in writing by certified or registered mail or courier mail or other
receipted means, at least 60 days prior to any expiration date, that the irrevocable
letter of credit will not be extended.
(B) In the event of any notice of expiration or non-extension of a letter of credit issued
under subdivision (a)(4)(A) of this section, the licensee shall be required to demonstrate
to the satisfaction of the Commissioner, 15 days prior to expiration, that the licensee
maintains and will maintain permissible investments in accordance with subsection
2542(a) of this subchapter upon the expiration of the letter of credit. If the licensee
is not able to do so, the Commissioner may draw on the letter of credit in an amount
up to the amount necessary to meet the licensee’s requirements to maintain permissible
investments in accordance with subsection 2542(a) of this subchapter. Any such draw
shall be offset against the licensee’s outstanding money transmission obligations.
The drawn funds shall be held in trust by the Commissioner or the Commissioner’s designated
agent, to the extent authorized by law, as agent for the benefit of the purchasers
and holders of the licensee’s outstanding money transmission obligations.
(C) The letter of credit shall provide that the issuer of the letter of credit will honor,
at sight, a presentation made by the beneficiary to the issuer of the following documents
on or prior to the expiration date of the letter of credit:
(i) the original letter of credit, including any amendments; and
(ii) a written statement from the beneficiary stating that any of the following events
have occurred:
(I) the filing of a petition by or against the licensee under the U.S. Bankruptcy Code,
11 U.S.C. §§ 101–110, as may be amended, for bankruptcy or reorganization;
(II) the filing of a petition by or against the licensee for receivership or the commencement
of any other judicial or administrative proceeding for its dissolution or reorganization;
(III) the seizure of assets of a licensee by a Commissioner pursuant to an emergency order
issued in accordance with applicable law on the basis of an action, a violation, or
a condition that has caused or is likely to cause the insolvency of the licensee;
or
(IV) the beneficiary has received notice of expiration or non-extension of a letter of
credit and the licensee failed to demonstrate to the satisfaction of the beneficiary
that the licensee will maintain permissible investments in accordance with subsection
2542(a) of this subchapter upon the expiration or non-extension of the letter of credit.
(D) The Commissioner may designate an agent to serve on the Commissioner’s behalf as beneficiary
to a letter of credit provided the agent and letter of credit meet requirements established
by the Commissioner. The Commissioner’s agent may serve as agent for multiple licensing
authorities for a single irrevocable letter of credit if the proceeds of the drawable
amount for the purposes of this subdivision are assigned to the Commissioner.
(E) The Commissioner is authorized and encouraged to participate in multistate processes
designed to facilitate the issuance and administration of letters of credit, including
services provided by the NMLS and State Regulatory Registry, LLC.
(5) One hundred percent of the surety bond or deposit provided for under section 2541
of this subchapter that exceeds the average daily money transmission liability in
this State.
(b) Unless permitted by the Commissioner by rule or order to exceed the limit as set forth
in this subchapter, the following investments are permissible under subsection 2542(a)
of this subchapter to the extent specified:
(1) Receivables that are payable to a licensee from its authorized delegates in the ordinary
course of business that are less than seven days old, up to 50 percent of the aggregate
value of the licensee’s total permissible investments.
(2) Of the receivables permissible under subdivision (b)(1) of this section, receivables
that are payable to a licensee from a single authorized delegate in the ordinary course
of business may not exceed 10 percent of the aggregate value of the licensee’s total
permissible investments.
(3) The following investments are permissible up to 20 percent per category and combined
up to 50 percent of the aggregate value of the licensee’s total permissible investments:
(A) a short-term investment of up to six months bearing an eligible rating;
(B) commercial paper bearing an eligible rating;
(C) a bill, note, bond, or debenture bearing an eligible rating;
(D) U.S. tri-party repurchase agreements collateralized at 100 percent or more with U.S.
government or agency securities, municipal bonds, or other securities bearing an eligible
rating;
(E) money market mutual funds rated less than “AAA” and equal to or higher than “A-” by
S&P or the equivalent from any other eligible rating service; and
(F) a mutual fund or other investment fund composed solely and exclusively of one or more
permissible investments listed in subdivisions (a)(1)–(3) of this section.
(4) Cash, including demand deposits, savings deposits, and funds in such accounts held
for the benefit of the licensee’s customers, at foreign depository institutions are
permissible up to 10 percent of the aggregate value of the licensee’s total permissible
investments if the licensee has received a satisfactory rating in its most recent
examination and the foreign depository institution:
(A) has an eligible rating;
(B) is registered under the Foreign Account Tax Compliance Act;
(C) is not located in any country subject to sanctions from the Office of Foreign Asset
Control; and
(D) is not located in a high-risk or non-cooperative jurisdiction as designated by the
Financial Action Task Force. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
Subchapter 007: REQUIREMENTS FOR MONEY SERVICERS
§ 2545. Change of location
(a) A licensee shall notify the Commissioner in writing within 30 days following any change
in locations in this State where the licensee or an authorized delegate of the licensee
provides money services, including limited stations and mobile locations.
(b) The notice required in subsection (a) of this section shall state the name and street
address of each location removed or added to the licensee’s list.
(c) Licensees shall submit with the notice required in subsection (a) of this section
a nonrefundable fee of $25.00 for each new authorized delegate location and for each
change in location for an authorized delegate. There is no fee to remove locations
of authorized delegates. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
§ 2546. Records
(a) In addition to the records required to be maintained by section 2119 of this title and any other records the Commissioner requires pursuant to this chapter or rule,
a licensee shall maintain the following records for at least five years for determining
the licensee’s compliance with this chapter:
(1) a general ledger posted at least monthly containing all asset, liability, capital,
income, and expense accounts;
(2) bank statements and bank reconciliation records; and
(3) if the licensee is a money transmitter:
(A) a record of each outstanding money transmission obligation sold;
(B) records of outstanding money transmission obligations;
(C) records of each outstanding money transmission obligation paid within the five-year
period; and
(D) a list of the last known names and addresses of all of the licensee’s authorized delegates.
(b) The records specified in subsection (a) of this section shall be maintained in any
form permitted in subsection 11301(c) of this title.
(c) Records specified in subsection (a) of this section may be maintained outside this
State if they are made accessible to the Commissioner on seven business-days’ notice. (Added 2023, No. 110 (Adj. Sess.), § 44, eff. July 1, 2024.)
Subchapter 008: CONSERVATION, LIQUIDATION, AND INSOLVENCY
§ 2555. Conservation, liquidation, and insolvency
To the extent applicable, the provisions of subchapters 2, 3, and 4 of chapter 209
of this title, excluding sections 19207, 19208, 19210, 19306, and 19307 of this title, shall apply to the conservation, liquidation, and insolvency of any licensee under
this chapter. Such licensee shall be treated as a financial institution for the purposes
of application of those subchapters. If an impaired or insolvent licensee is or becomes
a debtor in bankruptcy or the subject of a bankruptcy proceeding under federal law,
the Commissioner shall be relieved of any obligation otherwise imposed under this
section and subchapters 2, 3, and 4 of chapter 209 of this title, and shall relinquish
control of the assets and estate of such debtor to the duly appointed trustee in bankruptcy
or the debtor in possession, as the case may be. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2023, No. 110 (Adj. Sess.), § 45, eff. July 1, 2024.)
Subchapter 009: TIMELY TRANSMISSION, REFUNDS, AND DISCLOSURES BY MONEY TRANSMITTERS
§ 2560. Timely transmission
(a) Every licensee shall forward all money received for transmission in accordance with
the terms of the agreement between the licensee and the sender unless the licensee
has a reasonable belief or a reasonable basis to believe that the sender may be a
victim of fraud or that a crime or violation of law, rule, or regulation has occurred,
is occurring, or may occur.
(b) If a licensee fails to forward money received for transmission in accordance with
this section, the licensee must respond promptly to inquiries by the sender with the
reason for the failure unless providing a response would violate a state or federal
law, rule, or regulation. (Added 2023, No. 110 (Adj. Sess.), § 47, eff. July 1, 2024.)
§ 2561. Refunds
(a) This section does not apply to:
(1) money received for transmission subject to the federal Remittance Rule, 12 C.F.R. Part 1005, subpart B, as may be amended; or
(2) money received for transmission pursuant to a written agreement between the licensee
and payee to process payments for goods or services provided by the payee.
(b) Every licensee shall refund to the sender within 10 days of receipt of the sender’s
written request for a refund of any and all money received for transmission unless
any of the following occurs:
(1) The money has been forwarded within 10 days following the date on which the money
was received for transmission.
(2) Instructions have been given committing an equivalent amount of money to the person
designated by the sender within 10 days following the date on which the money was
received for transmission.
(3) The agreement between the licensee and the sender instructs the licensee to forward
the money at a time that is beyond 10 days following the date on which the money was
received for transmission. If funds have not yet been forwarded in accordance with
the terms of the agreement between the licensee and the sender, the licensee shall
issue a refund in accordance with the other provisions of this section.
(4) The refund is requested for a transaction that the licensee has not completed based
on a reasonable belief or a reasonable basis to believe that a crime or violation
of law, rule, or regulation has occurred, is occurring, or may occur.
(5) The refund request does not enable the licensee to:
(A) identify the sender’s name and address or telephone number; or
(B) identify the particular transaction to be refunded in the event the sender has multiple
transactions outstanding. (Added 2023, No. 110 (Adj. Sess.), § 47, eff. July 1, 2024.)
§ 2562. Receipts
(a) This section does not apply to:
(1) money received for transmission subject to the federal Remittance Rule, 12 C.F.R. Part 1005, subpart B, as may be amended;
(2) money received for transmission that is not primarily for personal, family, or household
purposes;
(3) money received for transmission pursuant to a written agreement between the licensee
and payee to process payments for goods or services provided by the payee; or
(4) payroll processing services.
(b) As used in this section and sections 2507 and 2574 of this chapter, “receipt” means
a paper receipt, electronic record, or other written confirmation. For a transaction
conducted in person, the receipt may be provided electronically if the sender requests
or agrees to receive an electronic receipt. For a transaction conducted electronically
or by phone, a receipt may be provided electronically. All electronic receipts shall
be provided in a retainable form.
(c) Every licensee or its authorized delegate shall provide the sender a receipt for money
received for transmission.
(1) The receipt shall contain the following information, as applicable:
(A) the name of the sender;
(B) the name of the designated recipient;
(C) the date of the transaction;
(D) the unique transaction or identification number;
(E) the name of the licensee, NMLS Unique ID, the licensee’s business address, and the
licensee’s customer service telephone number;
(F) the amount of the transaction in U.S. dollars;
(G) for transactions that involve money sent in a different currency from the money received:
(i) if the rate of exchange is fixed by the licensee at the time the transmission is initiated,
the receipt shall disclose the rate of exchange for the transaction, and the duration,
if any, for the payment to be made at the fixed rate of exchange so specified;
(ii) if the rate of exchange is not fixed at the time the transmission is initiated, the
receipt shall disclose that the rate of exchange for the transaction will be set at
the time the money is received;
(H) any fee charged by the licensee to the sender for the transaction; and
(I) any taxes collected by the licensee from the sender for the transaction.
(2) The receipt required by this section shall be in English and in the language principally
used by the licensee or authorized delegate to advertise, solicit, or negotiate, either
orally or in writing, for a transaction conducted in person, electronically, or by
phone, if other than English. (Added 2023, No. 110 (Adj. Sess.), § 47, eff. July 1, 2024.)
§ 2563. Notice
Every licensee or authorized delegate shall disclose on their website and mobile application
the name of the Department and a current link to the Vermont Banking Consumer Complaint
Form accompanied by statements conveying that, should the licensee’s customers have
a complaint about the licensee’s money transmission services they should first contact
the licensee using contact information supplied by the licensee and, if the complaint
remains unresolved, they can submit a complaint to the Department using the form. (Added 2023, No. 110 (Adj. Sess.), § 47, eff. July 1, 2024.)
§ 2564. Disclosure for payroll processing services
(a) A licensee that provides payroll processing services shall:
(1) issue reports to clients detailing client payroll obligations in advance of the payroll
funds being deducted from an account; and
(2) make available worker paystubs or an equivalent statement to workers.
(b) This section shall not apply to a licensee providing payroll processing services where
the licensee’s client designates the intended recipients to the licensee and is responsible
for providing the disclosures required by subdivision (a)(2) of this section. (Added 2023, No. 110 (Adj. Sess.), § 47, eff. July 1, 2024.)
Subchapter 010: VIRTUAL CURRENCY
§ 2571. Definitions
As used in this subchapter:
(1) “Blockchain” has the same meaning as in 12 V.S.A. § 1913(a)(1).
(2) “Blockchain analytics” means a software service that uses data from various virtual
currencies and their applicable blockchains to provide a risk rating specific to digital
wallet addresses from users of virtual-currency kiosks.
(3) “Digital wallet” means hardware or software that enables individuals to store and
use virtual currency.
(4) “Digital wallet address” means an alphanumeric identifier representing a destination
on a blockchain for a virtual currency transfer that is associated with a digital
wallet.
(5) “Exchange,” used as a verb, means to assume or exercise control of virtual currency
from or on behalf of a person, including momentarily, to buy, sell, trade, or convert:
(A) virtual currency for money, monetary value, bank credit, or one or more forms of virtual
currency, or other consideration; or
(B) money, monetary value, bank credit, or other consideration for one or more forms of
virtual currency.
(6) “Existing customer” means a consumer who:
(A) is engaging in a transaction at a virtual-currency kiosk in Vermont; and
(B) whose first transaction with the virtual-currency kiosk operator occurred more than
30 days prior.
(7) “New customer” means a consumer who:
(A) is engaging in a transaction at a virtual-currency kiosk in Vermont; and
(B) whose first transaction with the virtual-currency kiosk operator occurred not more
than 30 days prior.
(8) “Transfer” means to assume or exercise control of virtual currency from or on behalf
of a person and to:
(A) credit the virtual currency to the account or digital wallet of another person;
(B) move the virtual currency from one account or digital wallet of a person to another
account or digital wallet of the same person; or
(C) relinquish or transfer control or ownership of virtual currency to another person,
digital wallet, distributed ledger address, or smart contract. (Added 2023, No. 110 (Adj. Sess.), § 48, eff. July 1, 2024; amended 2025, No. 23, § 22, eff. July 1, 2025.)
§ 2572. Exemptions
(a) This subchapter shall not apply to the exchange or transfer of virtual currency, or
to virtual-currency storage or virtual-currency administration, by a person to the
extent that the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a–78oo, as may be amended, or the Commodities Exchange Act of 1936, 7 U.S.C. §§ 1–27f, as may be amended, govern such activity and the person is conducting such activity
in compliance with all applicable requirements of such laws and any regulations promulgated
thereunder.
(b) This subchapter shall not apply to activity by:
(1) a person that:
(A) provides only data storage or security services for a business engaged in virtual-currency
business activity and does not otherwise engage in virtual-currency business activity
on behalf of another person; or
(B) provides only to a person otherwise exempt from this chapter virtual currency as one
or more enterprise solutions used solely among each other and has no agreement or
relationship with a person that is an end-user of virtual currency;
(2) a person using virtual currency, including creating, investing, buying or selling,
or obtaining virtual currency as payment for the purchase or sale of goods or services,
solely on its own behalf for personal, family, or household purposes or for academic
purposes;
(3) a person whose virtual-currency business activity with or on behalf of persons is
reasonably expected to be valued, in the aggregate, on an annual basis at $5,000.00
or less, measured by the U.S. dollar equivalent of virtual currency;
(4) a securities intermediary, as defined in 9A V.S.A. § 8-102, or a commodity intermediary, as defined in 9A V.S.A. § 9-102, that:
(A) does not engage in the ordinary course of business in virtual-currency business activity
with or on behalf of a person in addition to maintaining securities accounts or commodities
accounts and is regulated as a securities intermediary or commodity intermediary under
federal law, law of this State other than this chapter, or law of another state; and
(B) affords a person protections comparable to those set forth in section 2575 of this
subchapter;
(5) a person that is engaged in testing products or services with the person’s own funds.
(c) The Commissioner may determine that other persons or classes of persons, given facts
particular to the person or class, are exempt from this chapter, when the person or
class is covered by requirements imposed under federal law on business engaged in
money services and the Commissioner determines that no additional requirements are
necessary to ensure the protection of the public. (Added 2023, No. 110 (Adj. Sess.), § 48, eff. July 1, 2024.)
§ 2573. Conditions precedent to engaging in virtual-currency business activity
(a) A person 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 person is:
(1) licensed under subchapter 2 of this chapter to engage in virtual-currency business
activity;
(2) an authorized delegate of a person licensed under subchapter 2 of this chapter to
engage in virtual-currency business activity if such money services are within the
scope of authority conferred by a written contract between the authorized delegate
and the licensee;
(3) exempt pursuant to section 2572 of this subchapter and engages in no licensable activity
outside the scope of such exemption; or
(4) exempt pursuant to section 2504 of this chapter and does not engage in money services
outside the scope of such exemption.
(b) A person that engages in virtual-currency business activity is engaged in the business
of money transmission.
(c) It is prohibited for a person to facilitate the provision of unlicensed virtual-currency
business activity by another person that is required to be licensed under this subchapter,
when the first person or the first person’s authorized agent receives notice from
a regulatory, law enforcement, or similar governmental authority, or knows from its
normal monitoring and compliance systems, or consciously avoids knowing that the unlicensed
person is in violation of this chapter.
(d) All provisions of this chapter, and any rule adopted under this chapter, that apply
to a person licensed under subchapter 2 of this chapter to engage in virtual-currency
business activity shall apply equally to any person required to hold a license pursuant
to subsection (a) of this section that does not hold one. Nothing herein shall be
interpreted to permit any such unlicensed person to engage in virtual-currency business
activity or hold itself out as being able to engage in any virtual-currency business
activity without a license. (Added 2023, No. 110 (Adj. Sess.), § 48, eff. July 1, 2024.)
§ 2574. Required disclosures
(a) Licensee disclosures, generally. A person licensed under subchapter 2 of this chapter to engage in virtual-currency
business activity shall provide the disclosures required by this section and any additional
disclosure the Commissioner determines reasonably necessary for the protection of
the public.
(1) A disclosure required by this section must be made separately from any other information
provided by the licensee and in a clear and conspicuous manner in a record the person
may keep.
(2) The Commissioner may waive one or more requirements in subsections (b)–(d) of this
section and approve alternative disclosures proposed by a licensee if the Commissioner
determines that the alternative disclosure is more appropriate for the virtual-currency
business activity and provides the same or equivalent information and protection to
the public.
(b) Licensee disclosures prior to business activity. Before engaging in virtual-currency business activity with a person, a licensee shall
disclose, to the extent applicable to the virtual-currency business activity the licensee
will undertake with the person:
(1) a schedule of fees and charges the licensee may assess, the manner by which fees and
charges will be calculated if they are not set in advance and disclosed, and the timing
of the fees and charges, including general disclosure regarding mark-ups and mark-downs
on purchases, sales, or exchanges of virtual currency in which the licensee or any
affiliate thereof is acting in a principal capacity;
(2) whether the product or service provided by the licensee is covered by:
(A) a form of insurance or is otherwise guaranteed against loss by an agency of the United
States:
(i) up to the full U.S. dollar equivalent of virtual currency purchased from the licensee
or for control of virtual currency by the licensee as of the date of the placement
or purchase, including the maximum amount provided by insurance under the Federal
Deposit Insurance Corporation or otherwise available from the Securities Investor
Protection Corporation; or
(ii) if not provided at the full U.S. dollar equivalent of virtual currency purchased from
the licensee or for control of virtual currency by the licensee, the maximum amount
of coverage for each person expressed in the U.S. dollar equivalent of the virtual
currency; or
(B) private insurance against theft or loss, including cyber theft or theft by other means;
(3) the irrevocability of a transfer or exchange and any exception to irrevocability;
(4) a description of:
(A) liability for an unauthorized, mistaken, or accidental transfer or exchange;
(B) the person’s responsibility to provide notice to the licensee of the transfer or exchange;
(C) the basis for any recovery by the person from the licensee;
(D) general error-resolution rights applicable to the transfer or exchange; and
(E) the method for the person to update the person’s contact information with the licensee;
(5) that the date or time when the transfer or exchange is made and the person’s account
is debited may differ from the date or time when the person initiates the instruction
to make the transfer or exchange;
(6) whether the person has a right to stop a preauthorized payment or revoke authorization
for a transfer and the procedure to initiate a stop-payment order or revoke authorization
for a subsequent transfer;
(7) the person’s right to receive a receipt, trade ticket, or other evidence of the transfer
or exchange;
(8) the person’s right to at least 30 days’ prior notice of a change in the licensee’s
fee schedule, other terms and conditions of operating its virtual-currency business
activity with the person, and the policies applicable to the person’s account; and
(9) that virtual currency is not money.
(c) Disclosures.
(1) Disclosures prior to each virtual-currency transaction. In connection with any virtual-currency transaction effected through a virtual-currency
kiosk in this State, or in any transaction where the licensee or any affiliate thereof
is acting in a principal capacity in a sale of virtual currency to, or purchase of
virtual currency from, a customer, then immediately prior to effecting such a purchase
or sale transaction with or on behalf of a customer, a licensee shall prominently
disclose and shall require the customer to acknowledge and confirm the terms and conditions
of the virtual-currency transaction, which shall include the following:
(A) the type, value, date, precise time, and amount of the transaction;
(B) the consideration charged for the transaction, including:
(i) any charge, fee, commission, or other consideration for any trade, exchange, conversion,
or transfer involving virtual currency; and
(ii) any difference between the price paid by the customer for any virtual currency and
the prevailing market price of such virtual currency, if any;
(C) for a customer of a virtual-currency kiosk, a description of the virtual-currency
kiosk operator’s refund policy, which shall be consistent with the requirements specified
in subsections 2577(k) and (l) of this subchapter;
(D) for a customer of a virtual-currency kiosk, the customer warning described in subdivision
(g)(1) of this section; and
(E) the daily transaction limit, if applicable.
(2) Disclosures for new kiosk accounts. When opening an account for a new customer, and prior to entering into an initial
transaction for, on behalf of, or with such customer, each virtual-currency kiosk
operator shall disclose relevant terms and conditions associated with its products,
services, and activities and with virtual currency, generally, including disclosures
substantially similar to the following:
(A) the customer’s liability for unauthorized virtual-currency transactions;
(B) under what circumstances the virtual-currency kiosk operator will, absent a court
or government order, disclose information concerning the customer’s account to third
parties;
(C) the customer’s right to receive periodic account statements and valuations from the
virtual-currency kiosk operator;
(D) the customer’s right to receive a receipt, trade ticket, or other evidence of a transaction;
(E) the customer’s right to prior notice of a change in the virtual-currency kiosk operator’s
rules or policies;
(F) a statement of the material risks associated with virtual-currency transactions, generally,
as described in subsection (h) of this section;
(G) the name and telephone number of the Department of Financial Regulation and a statement
disclosing that a customer may contact the Department with questions or complaints
about a licensee; and
(H) such other disclosures as are customarily given in connection with the opening of
customer accounts.
(d) Licensee receipt requirements. Except as otherwise provided in subsection (e) of this section, at the conclusion
of a virtual-currency transaction with or on behalf of a person, a licensee shall
provide the person with a receipt that contains:
(1) the name and contact information of the licensee, including information the person
may need to ask a question or file a complaint;
(2) the type, value, date, precise time, and amount of the transaction expressed in U.S.
currency;
(3) the consideration charged for the transaction, including:
(A) any charge, fee, commission, or other consideration for any trade, exchange, conversion,
or transfer involving virtual currency; or
(B) the amount of any difference between the price paid by the customer for any virtual
currency and the prevailing market price of such virtual currency, if any; and
(4) any other information required pursuant to section 2562 of this title.
(e) Licensee daily confirmation. If a licensee discloses that it will provide a daily confirmation in the initial
disclosure under subsection (b) of this section, the licensee may elect to provide
a single, daily confirmation for all transactions with or on behalf of a person on
that day instead of a per-transaction confirmation.
(f) Kiosk transaction receipt. Notwithstanding any other provision of law to the contrary, a virtual-currency kiosk
operator shall provide a customer with both a paper and an electronic receipt in a
retainable form for each virtual-currency transaction completed at a virtual-currency
kiosk. In addition to the information required to be included in a receipt under subsection
(d) of this section or under section 2562 of this title, each receipt for a virtual-currency transaction completed at a virtual-currency
kiosk shall include:
(1) the identification of any applicable digital wallet address to which virtual currency
is transmitted;
(2) the full name of the account owner;
(3) any unique transaction identifiers;
(4) a prominent statement of the virtual-currency kiosk operator’s refund obligations
under this section, in a form approved by the Commissioner;
(5) a statement of the operator’s liability for nondelivery or delayed delivery of virtual
currency; and
(6) the name and telephone number of the Department of Financial Regulation and a statement
disclosing that a customer may contact the Department with questions or complaints
about an operator.
(g) Customer warning.
(1) Prior to entering into a virtual-currency transaction with a customer at a virtual-currency
kiosk, and as required by subdivision (c)(1)(D) of this section, each virtual-currency
kiosk operator shall ensure a warning is disclosed to the customer substantially similar
to the following:
Customer Notice. Please Read Carefully.
Did you receive a phone call from your bank, software provider, the police, or were you directed to make a payment for Social Security, a utility bill, an investment, warrants, or bail money at this kiosk? STOP
Is anyone on the phone pressuring you to make a payment of any kind? STOP
I understand that the purchase and sale of cryptocurrency may be a final, irreversible, and nonrefundable transaction.
I confirm I am sending funds to a digital wallet I own or directly have control over. I confirm that I am using funds gained from my own initiative to make my transaction.
(2) A virtual-currency kiosk operator shall ensure a customer has a readily accessible
opportunity to end a transaction for any reason prior to its completion.
(h) Statement of material risks. As used in subdivision (c)(2)(F) of this section, a statement of material risks associated
with virtual-currency transactions, generally, shall include disclosures substantially
similar to the following:
(1) Virtual currency is not legal tender, is not backed by the government, and accounts
and value balances are not subject to Federal Deposit Insurance Corporation or Securities
Investor Protection Corporation protections.
(2) Legislative and regulatory changes or actions at the State, federal, or international
level may adversely affect the use, transfer, exchange, and value of virtual currency.
(3) Transactions in virtual currency may be irreversible and, accordingly, losses due
to fraudulent or accidental transactions may not be recoverable.
(4) Some virtual-currency transactions shall be deemed to be made when recorded on a public
ledger, which is not necessarily the date or time that the customer initiates the
transaction.
(5) The value of virtual currency may be derived from the continued willingness of market
participants to exchange fiat currency for virtual currency, which may result in the
potential for permanent and total loss of value of a particular virtual currency should
the market for that virtual currency disappear.
(6) There is no assurance that a person who accepts a virtual currency as payment today
will continue to do so in the future.
(7) The volatility and unpredictability of the price of virtual currency relative to fiat
currency may result in significant loss over a short period of time.
(8) The nature of virtual currency may lead to an increased risk of fraud or cyber attack.
(9) The nature of virtual currency means that any technological difficulties experienced
by the virtual-currency kiosk operator may prevent the access or use of a customer’s
virtual currency.
(10) Any bond or trust account maintained by the virtual-currency kiosk operator for the
benefit of its customers may not be sufficient to cover all losses incurred by customers. (Added 2023, No. 110 (Adj. Sess.), § 48, eff. July 1, 2024; amended 2025, No. 23, § 23, eff. July 1, 2025.)
§ 2575. Property interests and entitlements to virtual currency
(a) A person licensed under subchapter 2 of this chapter to engage in virtual-currency
business activity that has control of virtual currency or provides virtual-currency
storage to, for, or on behalf of one or more persons shall maintain custody and control
of virtual currency in an identical type and amount of virtual currency sufficient
to satisfy the aggregate entitlements of such persons to such identical types and
amounts of virtual currency.
(b) For the purposes of subsection (a) of this section, units of virtual currency are
only of an identical type and amount if such units are fungible in all respects, including
having the same issuer and being identical in amount, market capitalization, circulating
supply, name, U.S. dollar equivalent of virtual currency, liquidity, use, rights,
restrictions, functionality, permissions, and any other material attribute.
(c) If a licensee violates subsection (a) of this section, the property interests of the
persons in the virtual currency are pro rata property interests in the type of virtual
currency to which the persons are entitled, without regard to the time the persons
became entitled to the virtual currency or the licensee obtained control of the virtual
currency.
(d) The virtual currency referred to in this section is and shall be:
(1) held for the persons entitled to the virtual currency;
(2) not property of the licensee or any person required to be licensed under this chapter;
(3) not subject to any claims, liens, or encumbrances of creditors of the licensee or
any person required to be licensed under this chapter; and
(4) deemed to be a permissible investment under this chapter to the extent that there
is an outstanding money transmission obligation owed to a customer in such type and
amount of virtual currency.
(e) A person licensed under subchapter 2 of this chapter to engage in virtual-currency
business activity is prohibited from selling, transferring, assigning, lending, hypothecating,
pledging, or otherwise using or encumbering virtual currency stored, held, controlled,
or maintained by, or under the custody or control of, such licensee on behalf of another
person except for the sale, transfer of ownership, or assignment of such assets at
the direction of such other person.
(f) A person licensed under subchapter 2 of this chapter to engage in virtual-currency
business activity shall not directly or indirectly use or engage any other person,
including any virtual-currency control-services vendor, to store or hold custody or
control of any virtual currency for or on behalf of any customer in this State, unless
such other person is licensed under subchapter 2 of this chapter to engage in virtual-currency
business activity, a financial institution or credit union that is exempt from licensing
under subdivision 2504(7) of this chapter, or a qualified custodian approved by the
Commissioner by rule or order to hold virtual currency on behalf of customers in this
State.
(g) Virtual currency held in violation of subsection (f) of this section shall not be
deemed to be a permissible investment for purposes of satisfying a licensee’s obligations
under subsection 2542(a) of this chapter, but shall be deemed to be a permissible
investment for purposes of subsections 2542(c)–(e) of this chapter.
(h) The Commissioner may by rule or order adopt additional consumer protections concerning
virtual currency, including:
(1) rules regarding the segregation of virtual currencies and accounts held for or on
behalf of customers from a licensee’s own virtual currencies and assets;
(2) rules related to the custody, storage, security, ownership of, and title to permissible
investments and customer virtual currencies and assets;
(3) rules related to the use of virtual-currency control service vendors or other custodians
to hold custody or control of virtual currency;
(4) rules related to audit requirements for customer assets;
(5) rules setting standards, limits, prohibitions, disclosure requirements, and procedures
regarding the types of virtual currencies and related services, activities, and transactions
that licensees may offer in this State as may be necessary or appropriate for the
protection of consumers or compliance with the terms of this chapter;
(6) rules requiring compliance with specific provisions of the Uniform Commercial Code;
and
(7) any rules as may be necessary or appropriate for the protection of consumers or necessary
or appropriate to effectuate the purposes of this chapter. (Added 2023, No. 110 (Adj. Sess.), § 48, eff. July 1, 2024.)
§ 2576. Additional requirements and clarifications for virtual-currency business activities
(a) To ensure adequate consumer protection, the Commissioner may adopt by rule provisions
that specify limitations to and the method by which a person licensed under subchapter
2 of this chapter to engage in virtual-currency business activity may include virtual
currency and virtual currency-denominated assets in the calculation of its net worth
pursuant to section 2540 of this chapter.
(b) In addition to the records required to be maintained by sections 2119 and 2546 of this title and any other records the Commissioner requires pursuant to this chapter or rule,
a person licensed under subchapter 2 of this chapter to engage in virtual-currency
business activity shall maintain, for all virtual-currency business activity with
or on behalf of a person, for at least five years after the date of the activity,
a record of:
(1) each transaction of the licensee with or on behalf of the person or for the licensee’s
account in this state, including:
(A) the identity of the person;
(B) the form of the transaction;
(C) the amount, date, and payment instructions given by the person; and
(D) the account number, name, and U.S. Postal Service address of the person, and, to the
extent feasible, other parties to the transaction;
(2) the aggregate number of transactions and aggregate value of transactions by the licensee
with or on behalf of the person and for the licensee’s account in this State, expressed
in U.S. dollar equivalent of virtual currency for the previous 12 calendar months;
(3) each transaction in which the licensee exchanges one form of virtual currency for
money or another form of virtual currency with or on behalf of the person;
(4) a general ledger posted at least monthly that lists all assets, liabilities, capital,
income, and expenses of the licensee;
(5) each business-call report the licensee is required to create or provide to the Department
or NMLS;
(6) bank statements and bank reconciliation records for the licensee and the name, account
number, and U.S. Postal Service address of each bank the licensee uses in the conduct
of its virtual-currency business activity with or on behalf of the person;
(7) a report of any dispute with the person; and
(8) a report of any virtual-currency business activity transaction with or on behalf of
a person that the licensee was unable to complete.
(c) It is unlawful for a person licensed under subchapter 2 of this chapter to engage
in virtual-currency business activity, or any other person, in connection with the
offer to sell, the offer to purchase, the sale, the purchase of a virtual currency,
or in connection with any virtual-currency business activity or transaction in virtual
currency, directly or indirectly:
(1) to employ a device, scheme, or artifice to defraud;
(2) to make an untrue statement of a material fact or to omit to state a material fact
necessary in order to make the statements made, in light of the circumstances under
which they were made, not misleading; or
(3) to engage in an act, practice, or course of business that operates or would operate
as a fraud or deceit upon another person.
(d) Persons licensed under subchapter 2 of this chapter to engage in virtual-currency
business activity shall comply at all times with all applicable federal and state
laws, rules, and regulations, including the following laws, as may be amended: the
Securities Act of 1933, 15 U.S.C. §§ 77a–77aa, the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a–78oo, the Commodities Exchange Act of 1936, 7 U.S.C. §§ 1–27f, and the Vermont Securities Act, 9 V.S.A. chapter 150. (Added 2023, No. 110 (Adj. Sess.), § 48, eff. July 1, 2024.)
§ 2577. Virtual-currency kiosk operators
(a) Daily transaction limit.
(1) A virtual-currency kiosk operator shall not accept or dispense more than $2,000.00
of cash in a day in connection with virtual-currency transactions with a single, new
customer in this State via one or more virtual-currency kiosks.
(2) A virtual-currency kiosk operator shall not accept or dispense more than $5,000.00
of cash in a day in connection with virtual-currency transactions with a single, existing
customer in this State via one or more virtual-currency kiosks.
(b) Fee cap. 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:
(1) $5.00; or
(2) 15 percent of the U.S. dollar equivalent of virtual currency involved in the transaction
or transactions.
(c) Single transaction. The purchase, sale, exchange, swap, or conversion of virtual currency, or the subsequent
transfer of virtual currency, in a series of transactions shall be deemed to be a
single transaction for purposes of subsections (a) and (b) of this section.
(d) Licensing requirement. A virtual-currency kiosk operator shall comply with the licensing requirements of
this subchapter to the extent that the virtual-currency kiosk operator engages in
virtual-currency business activity.
(e) Operator accountability. If a virtual-currency kiosk operator allows or facilitates another person to engage
in virtual-currency business activity via a virtual-currency kiosk in this State that
is owned, operated, or managed by the virtual-currency kiosk operator, the virtual-currency
kiosk operator shall do all of the following:
(1) ensure that the person engaging in virtual-currency business activity is licensed
under subchapter 2 of this chapter to engage in virtual-currency business activity
and complies with all other applicable provisions of this chapter;
(2) ensure that any charges collected from a customer via the virtual-currency kiosk comply
with the fee cap established in subsection (b) of this section; and
(3) comply with all other applicable provisions of this chapter.
(f) Moratorium. To protect the public safety and welfare and safeguard the rights of consumers, virtual-currency
kiosks shall not be permitted to operate in Vermont prior to July 1, 2026. This moratorium
shall not apply to a virtual-currency kiosk that was duly licensed and operational
in Vermont on or before June 30, 2024.
(g) Customer identification. For each virtual-currency transaction occurring at a virtual-currency kiosk in this
State, the virtual-currency kiosk operator shall verify the identity of the customer
prior to accepting payment from the customer. A virtual-currency kiosk operator shall
not allow a customer to engage in any transaction at a virtual-currency kiosk under
any name, account, or identity other than the customer’s own true name and identity.
A virtual-currency kiosk operator shall obtain a copy of a government-issued identification
card that identifies the customer and shall collect additional customer information,
including the customer’s name, date of birth, telephone number, address, and email
address prior to accepting any payment from a customer at a virtual-currency kiosk
in this State. In addition, a virtual-currency kiosk operator shall take a photograph
of the customer in a retainable format at the virtual-currency kiosk for each transaction.
A virtual-currency kiosk operator shall be strictly liable for any violation of this
subsection.
(h) Customer support. A virtual-currency kiosk operator shall offer live, toll-free, telephone customer
support during the hours of operation of a virtual-currency kiosk. The customer support
telephone number shall be displayed on the virtual-currency kiosk or on the virtual-currency
kiosk screen.
(i) Mandatory live screening.
(1) A virtual-currency kiosk operator shall identify and speak by telephone with:
(A) a new customer over 60 years of age prior to such customer’s first virtual-currency
transaction with the virtual-currency kiosk operator; or
(B) a customer attempting to conduct more than $5,000.00 in virtual-currency transactions
during any consecutive 10-day period.
(2) The virtual-currency kiosk operator’s approval of a transaction subject to a mandatory
live screening under this subsection shall be dependent upon its assessment of its
communication with the customer during the screening.
(3) A virtual-currency kiosk operator shall record and retain a copy of each mandatory
live screening.
(4) During the mandatory live screening, the virtual-currency kiosk operator shall:
(A) positively identify the customer;
(B) reconfirm any attestations made by the customer at the virtual-currency kiosk;
(C) discuss the purpose of the transaction; and
(D) discuss types of fraudulent schemes relating to virtual currency.
(j) Blockchain analytics. A virtual-currency kiosk operator shall use blockchain analytics software and retain
an established third party that specializes in performing blockchain analytics to
assist in the prevention of sending purchased virtual currency from a virtual-currency
kiosk operator to a digital 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 its current use of blockchain analytics.
(k) Full refund for new customers. The virtual-currency kiosk operator shall provide a full refund to a customer who
was fraudulently induced to engage in a virtual-currency kiosk transaction, provided
the fraudulently induced transaction occurred while the customer was a new customer
and further provided the customer contacts the virtual-currency kiosk operator and
a law enforcement or government agency to inform the operator and the agency of the
fraudulent nature of the transaction within 90 days after the customer’s last virtual-currency
transaction with the virtual-currency kiosk operator. The refund shall include any
fees charged in association with the fraudulently induced transaction.
(l) Fee refund for existing customers. The virtual-currency kiosk operator shall provide a fee refund to an existing customer
who has been fraudulently induced to engage in a virtual-currency kiosk transaction,
provided the customer contacts the virtual-currency kiosk operator and a law enforcement
or government agency to inform the operator and the agency of the fraudulent nature
of the transaction within 90 days after the last fraudulently induced transaction.
The refund shall include all fees charged in association with the fraudulently induced
transaction.
(m) Fraud prevention. A virtual-currency kiosk operator shall take reasonable steps to detect and prevent
fraud, including establishing and maintaining a written antifraud policy. The antifraud
policy shall, at a minimum, include the following:
(1) the identification and assessment of fraud-related risk areas;
(2) procedures and controls to protect against identified risks;
(3) allocation of responsibility for monitoring risks;
(4) procedures for the periodic evaluation and revision of the antifraud procedures, controls,
and monitoring mechanisms;
(5) procedures and controls that prevent more than one customer from using the same digital
wallet;
(6) procedures and controls that enable the virtual-currency kiosk operator to prevent
a digital wallet from being used at a virtual-currency kiosk it operates if the operator
knows or reasonably should know the digital wallet is affiliated with fraudulent activities;
and
(7) policies and procedures for using a risk-based method for monitoring customers on
a post transaction basis.
(n) Due diligence policy. A virtual-currency kiosk operator shall maintain, implement, and enforce a written
Enhanced Due Diligence Policy. The Policy shall be reviewed and approved by the virtual-currency
kiosk operator’s board of directors or an equivalent governing body of the virtual-currency
kiosk operator. The Policy shall identify, at a minimum, individuals who are at risk
of fraud based on age or mental capacity.
(o) Compliance policies. A virtual-currency kiosk operator shall maintain, implement, and enforce written compliance
policies and procedures. Such policies and procedures shall be reviewed and approved
by the virtual-currency kiosk operator’s board of directors or an equivalent governing
body of the virtual-currency kiosk operator.
(p) Compliance officer.
(1) A virtual-currency kiosk operator shall designate and employ a compliance officer
who meets the following requirements:
(A) is qualified to coordinate and monitor compliance with this section and all other
applicable federal and State laws and regulations;
(B) is employed full-time by the virtual-currency kiosk operator; and
(C) is not an individual who owns more than 20 percent of the virtual-currency kiosk operator
by whom the individual is employed.
(2) Compliance responsibilities required under federal and State law and regulation shall
be completed by one or more full-time employees of the virtual-currency kiosk operator.
(q) Consumer protection officer. A virtual-currency kiosk operator shall designate and employ a consumer protection
officer who meets the following requirements:
(1) is qualified to coordinate and monitor compliance with this section and all other
applicable federal and State laws and regulations;
(2) is employed full-time by the virtual-currency kiosk operator; and
(3) is not an individual who owns more than 20 percent of the virtual-currency kiosk operator
by whom the individual is employed.
(r) The Commissioner may adopt rules the Commissioner deems necessary and proper to carry
out the purposes of this section, including with respect to what constitutes fraudulent
activity or a fraudulently induced transaction in the context of customer transactions
at a virtual-currency kiosk. (Added 2023, No. 110 (Adj. Sess.), § 48, eff. July 1, 2024; amended 2025, No. 23, § 24, eff. July 1, 2025.)
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