SB 1705

relating to the regulation of virtual currency kiosks.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subtitle E, Title 3, Finance Code, is amended by
adding Chapter 161 to read as follows:
CHAPTER 161. VIRTUAL CURRENCY KIOSKS
Sec. 161.001.  DEFINITIONS.  In this chapter:
(1)  "Blockchain analytics" means the analysis of data
from blockchains or public distributed ledgers, including
associated transaction information.
(2)  "Blockchain analytics software" means a software
service that uses blockchain analytics data to provide
risk-specific information, including information relating to
virtual currency wallet addresses.
(3)  "Department" means the Texas Department of
(4)  "Transaction hash" means a unique identifier made
up of a string of characters that act as a record of and provide
proof that the transaction was verified and added to the
(5)  "Virtual currency" has the meaning assigned by
Section 12.001, Business & Commerce Code.
(6)  "Virtual currency address" means an alphanumeric
identifier associated with a virtual currency wallet identifying
the location to which a virtual currency kiosk transaction can be
(7)  "Virtual currency kiosk" means an electronic
terminal operated by a virtual currency kiosk operator to enable
the operator to facilitate the exchange of virtual currency for
money, bank credit, or other virtual currency, including by:
(A)  connecting directly to a separate virtual
currency exchanger that performs the actual virtual currency
(B)  drawing on the virtual currency in the
possession of the electronic terminal's operator.
(8)  "Virtual currency kiosk operator" means a person
that engages in virtual currency business activity through a
virtual currency kiosk located in this state or a person that owns,
operates, or manages a virtual currency kiosk located in this state
through which virtual currency business activity is offered.
(9)  "Virtual currency kiosk transaction" means a
transmission conducted or performed, wholly or partly, by
electronic means on a virtual currency kiosk, including a
transaction made at a virtual currency kiosk to purchase virtual
currency with fiat currency or to sell virtual currency for fiat
(10)  "Virtual currency wallet" means a software
application or other mechanism providing a means to hold, store, or
Sec. 161.002.  LICENSING AND REGISTRATION REQUIRED.  (a)  A
virtual currency kiosk operator may not conduct virtual currency
business activity in this state unless the operator holds a money
transmission license under Subchapter C, Chapter 152.
(b)  A virtual currency kiosk operator may not locate, or
allow a third party to locate, a virtual currency kiosk in this
state unless the virtual currency kiosk operator:
(1)  registers the kiosk with the department; and
(2)  obtains the prior approval of the department for
Sec. 161.003.  REPORT REQUIRED.  Not later than the 45th day
following the date of the end of a calendar quarter, a virtual
currency kiosk operator shall file with the department a report of
the location of each virtual currency kiosk of the operator in this
state. The report required under this section must include for each
(2)  any fictitious or trade name;
(4)  start date of operation of the virtual currency
(5)  end date of operation of the virtual currency
kiosk at a location, if applicable; and
(6)  each virtual currency address associated with the
Sec. 161.004.  REQUESTS FOR KNOW YOUR CUSTOMER INFORMATION.
(a)  Not later than 24 hours after receiving a written request from
a law enforcement agency, a virtual currency kiosk operator shall
provide to the agency the information required as "Know Your
Customer" information under Financial Industry Regulatory
Authority Rule 2090 as it existed on September 1, 2025.
(b)  A release of information under Subsection (a) does not
require a subpoena or court order.
Sec. 161.005.  DISCLOSURES ON MATERIAL RISK.  (a)  A virtual
currency kiosk operator in this state shall disclose in a clear,
conspicuous, and easily readable manner all material risks
generally associated with virtual currency, including that:
(1)  virtual currency is not legal tender and is not
backed or insured by the government;
(2)  accounts and value balances of virtual currency
are not subject to Federal Deposit Insurance Corporation, National
Credit Union Administration, or Securities Investor Protection
(3)  some virtual currency kiosk transactions are
deemed to be made when recorded on a public ledger that may not be
the date or time when the person initiates the transaction;
(4)  virtual currency's value may be derived from the
continued willingness of market participants to exchange fiat
currency for virtual currency, which may result in the permanent
and total loss of a particular virtual currency's value if the
market for virtual currency disappears;
(5)  a person who accepts a virtual currency as payment
is not required to accept the currency as payment and may decline to
accept the currency in a future transaction;
(6)  the volatility and unpredictability of the price
of virtual currency relative to fiat currency may result in a
significant loss in value over a short period;
(7)  the nature of virtual currency means that any
technological difficulties experienced by a virtual currency kiosk
operator may prevent access to or use of the operator's customer's
(8)  any bond maintained by the virtual currency kiosk
operator for the benefit of customers may not cover all losses
(b)  In addition to the disclosures required under
Subsection (a), a virtual currency kiosk operator shall provide a
(1)  is written prominently and in bold type and must be
(2)  is provided separately from the disclosures
required under Subsection (a); and
(3)  states: "WARNING: LOSSES DUE TO FRAUDULENT OR
ACCIDENTAL TRANSACTIONS ARE NOT RECOVERABLE AND TRANSACTIONS IN
VIRTUAL CURRENCY ARE IRREVERSIBLE. VIRTUAL CURRENCY TRANSACTIONS
MAY BE USED TO STEAL YOUR MONEY BY CRIMINALS IMPERSONATING THE
GOVERNMENT, ORGANIZATIONS, OR YOUR LOVED ONES. THEY CAN THREATEN
JAIL TIME, SAY YOUR IDENTITY HAS BEEN STOLEN, ALLEGE YOUR COMPUTER
HAS BEEN HACKED, INSIST YOU WITHDRAW MONEY FROM YOUR BANK ACCOUNT TO
PURCHASE VIRTUAL CURRENCY, OR A NUMBER OF OTHER SCAMS. IF YOU
BELIEVE YOU ARE BEING SCAMMED, CALL YOUR LOCAL LAW ENFORCEMENT.".
(c)  The disclosures required under Subsection (a) must be
displayed on the screen of the virtual currency kiosk with the
ability for a customer to acknowledge the receipt of the
Sec. 161.006.  TRANSACTION-RELATED DISCLOSURES.  (a)  A
virtual currency kiosk operator shall disclose all relevant terms
generally associated with virtual currency and with the products,
services, and activities of the virtual currency kiosk operator,
(1)  the virtual currency kiosk operator's liability
for unauthorized virtual currency kiosk transactions;
(2)  the customer's liability for unauthorized virtual
(3)  the customer's right to receive prior notice of a
change in the virtual currency kiosk operator's rules or policies;
(4)  under what circumstances the virtual currency
kiosk operator, without a court or government order, is authorized
to disclose a customer's account information to third parties.
(b)  Before a virtual currency kiosk transaction is entered
into for, on behalf of, or with a customer, a virtual currency kiosk
operator shall disclose the terms of the transaction in a clear,
conspicuous, and easily readable manner, including:
(1)  the amount of the transaction denominated in:
(A)  United States dollars; and
(B)  the applicable virtual currency involved in
(2)  any transaction fees, expenses, or charges,
including applicable exchange rates;
(3)  the type and nature of the transaction;
(4)  a warning that once completed, the transaction may
(5)  the daily virtual currency kiosk transaction limit
prescribed by Section 161.012; and
(6)  any other disclosures that are customarily
provided in connection with a virtual currency kiosk transaction.
Sec. 161.007.  ACKNOWLEDGMENT OF DISCLOSURES.  Before
completing a transaction, a virtual currency kiosk operator shall
ensure that each customer who engages in a virtual currency kiosk
transaction using the operator's kiosk acknowledges receipt of all
disclosures required under this chapter by confirmation of consent.
Sec. 161.008.  RECEIPT REQUIRED.  After a transaction is
completed, the virtual currency kiosk operator shall provide the
customer with a physical receipt in the customer's preferred
(1)  the virtual currency kiosk operator's name and
contact information, including a telephone number to answer
questions and register complaints;
(2)  the type, value, date, and precise time of the
transaction, the transaction hash, and each applicable virtual
(3)  the name and contact information of the sender;
(4)  the name and contact information of the designated
(6)  the exchange rate of the virtual currency to
(7)  a statement of the virtual currency kiosk
operator's liability for nondelivery or delayed delivery;
(8)  a statement of the virtual currency kiosk
(9)  any additional information the department may
Sec. 161.009.  PREVENTION OF FRAUDULENT ACTIVITY.  A virtual
currency kiosk operator must use blockchain analytics software to
assist in the prevention of sending purchased virtual currency from
a virtual currency kiosk operator to a virtual currency wallet
known to be affiliated with fraudulent activity at the time of a
transaction. The department may request evidence from any virtual
currency kiosk operator of current use of blockchain analytics.
Sec. 161.010.  FRAUD POLICY.  A virtual currency kiosk
operator shall take reasonable steps to detect and prevent fraud,
including establishing and maintaining a written antifraud policy.
The policy required by this section shall, at a minimum, include:
(1)  the identification and assessment of
(2)  procedures and controls to protect against
(3)  allocation of responsibility for monitoring
(4)  procedures for the periodic evaluation and
revision of the antifraud procedures, controls, and monitoring
Sec. 161.011.  MEASURES TO ENSURE COMPLIANCE WITH LAWS.  (a)
A virtual currency kiosk operator must designate and employ a
(1)  is qualified to coordinate and monitor compliance
with the requirements of this chapter and as otherwise provided by
federal and state laws, rules, and regulations;
(2)  is employed full-time by the virtual currency
(3)  does not own more than 20 percent of the virtual
(b)  Any compliance responsibilities required under federal
or state laws, rules, and regulations shall be completed by the
full-time employees of the virtual currency kiosk operator.
Sec. 161.012.  DAILY TRANSACTION LIMIT.  A virtual currency
kiosk operator may not enter into a transaction or series of
transactions with a customer for a total amount having a value of
greater than $1,000 in a 24-hour period.
Sec. 161.013.  PERMITTED FEES.  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 virtual currency kiosk in this
state, including any difference between the price charged to a
customer to buy, sell, exchange, or convert virtual currency and
the prevailing market value of the virtual currency at the time of
the transaction may not exceed the greater of:
(2)  three percent of the United States dollar
equivalent of virtual currency involved in the transaction or
Sec. 161.014.  CUSTOMER SERVICE.  A virtual currency kiosk
operator that conducts business in this state must:
(1)  provide live customer service between the hours of
8 a.m. and 10 p.m. Monday through Friday; and
(2)  display on the virtual currency kiosk or screen of
(A)  the customer service toll-free telephone
(B)  the name, address, and telephone number of
(C)  the days on, time on, and method by which a
customer can contact the operator for assistance.
Sec. 161.015.  SEIZURE.  Any virtual currency kiosk of a
virtual currency kiosk operator may be seized if the operator fails
to comply with the requirements of this chapter.
Sec. 161.016.  RULES.  The department may adopt rules
necessary to implement, administer, and enforce this chapter.
SECTION 2.  This Act takes effect September 1, 2025.