On June 25, the California DFPI announced it had entered into a consent order with a crypto kiosk operator for violations of the Digital Financial Assets Law (DFAL). Under the consent order, the operator agreed to pay a $300,000 penalty, including $51,700 in restitution to California residents, and implement measures to address and prevent future violations. According to the press release, this was the first enforcement action taken under the DFAL after going into effect in January 2024 (covered by InfoBytes here).
The DFAL seeks to regulate risks associated with cryptoasset transaction kiosks. Under California law, operators must not accept or dispense more than $1,000 per day from or to a customer through a kiosk. The DFPI found that since January 1, 2024, the crypto kiosk operator accepted more than $1,000 from a customer on several occasions and issued transaction receipts that were allegedly not in compliance with the DFAL’s requirement to include the name of the digital financial asset exchange used to determine and disclose the difference between the market price of a digital financial asset and the price quoted and used by the kiosk operator in the transaction.
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