Title
Creating Chapter 297 of the Legislative Code prohibiting the use and placement of virtual currency kiosks within the City.
Body
SECTION 1
WHEREAS, virtual currency kiosks or cryptocurrency kiosks (“kiosks”) are a significant instrument used in financial fraud and financial scams. The Federal Bureau of Investigation (“FBI”) reported that, in 2024, there were nearly 150,000 complaints referencing cryptocurrency and $9.3 billion in reported losses. Of these totals, nearly 11,000 complaints and $246.7 million in losses were connected to transactions at kiosks; and
WHEREAS, the FBI reports that people engaged in financial fraud and financial scams use kiosks by providing detailed instructions to their victims, including how to withdraw cash from their bank, how to locate a kiosk, and how to deposit and send the cash using the kiosk, to complete a nearly anonymous transaction using cryptocurrency to steal cash; and
WHEREAS, of the individuals who reported being victims of these financial fraud and financial scams using kiosks in 2024, 1,852 identified themselves as being in Minnesota, and the losses identified by victims in Minnesota totaled over $91 million; and
WHEREAS, the City of Saint Paul Police Department has limited resources to investigate and pursue these types of criminal activities. In addition, these virtual transactions allow transfers of funds across jurisdictions, thereby impeding the ability of any local law enforcement agency and any U.S. law enforcement agency to recover such funds; and
WHEREAS, under Minnesota Statutes section 412.221, subdivision 32, the City of Saint Paul has the authority and responsibility to prevent crime, protect property, and promote the general welfare of those individuals present within its boundaries; and now, therefore, be it
RESOLVED, the Council of the City of Saint Paul does ordain:
SECTION 2
Title XXVIII of the Saint Paul Legislative Code is hereby amended to include Chapter 297, which must read as follows:
The purpose of this chapter is to prohibit the use and placement of virtual currency kiosks or cryptocurrency kiosks in the City of Saint Paul to protect the general welfare of the public.
Sec. 297.01. Definitions. Unless otherwise noted in this section, the words, terms, and phrases, when used in this Chapter, have the meaning ascribed to them in Minnesota Statutes section 53B.69.
City means the City of Saint Paul, Minnesota.
Person means any individual, business, corporation, license holder, or entity.
Virtual Currency means a digital representation of value that: is used as a medium of exchange, unit of account, or store of value; and is not money, whether or not denominated in money. Virtual Currency does not include transactions where a Person grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the Person for money, fiat currency, bank credit, or Virtual Currency. It also does not include digital representation of value issued by or on behalf of a Person used solely within an online game, game platform, or family of games sold by the same Person or offered on the same game platform.
Virtual Currency Kiosk or Cryptocurrency Kiosk means an electronic terminal acting as a mechanical agent of the Virtual Currency Kiosk Operator to enable the Virtual Currency Kiosk Operator to facilitate the exchange of Virtual Currency for money, fiat currency, bank credit, or other Virtual Currency, including but not limited to (1) connecting directly to a separate exchanger that performs the actual Virtual Currency Transfer, or (2) drawing upon the Virtual Currency in the possession of the Virtual Currency Kiosk Operator.
Virtual Currency Kiosk Host means the Person that leases, allows, authorizes, houses, or in any way permits a Virtual Currency Kiosk within the City. A Virtual Currency Kiosk Host may authorize or permit the Virtual Currency Kiosk through written or verbal agreement, and may or may not receive any compensation therefor.
Virtual Currency Kiosk Operator means a Person that operates a Virtual Currency Kiosk within the City.
Virtual Currency Kiosk Transaction means an exchange or transfer of money, fiat currency, bank credit, or Virtual Currency, conducted or performed, in whole or in part, by electronic means via a Virtual Currency Kiosk. Virtual Currency Kiosk Transaction also means an exchange or transfer made at a Virtual Currency Kiosk to purchase Virtual Currency with money, fiat currency, bank credit, or other Virtual Currency or to sell Virtual Currency for money, fiat currency, bank credit, or other Virtual Currency.
Virtual Currency Transfer means to assume control of Virtual Currency from, or on behalf of, a Person and to credit the Virtual Currency to the account of another Person, move the Virtual Currency from one account to another account of the same Person, or relinquish control of the Virtual Currency to another Person.
Sec. 297.02. Virtual Currency Kiosk prohibited. It is unlawful for any Person to host, allow, operate, permit, locate, or place an operational Virtual Currency Kiosk within the City. It is also unlawful for any Virtual Currency Kiosk Operator or any Virtual Currency Kiosk Host to allow any Virtual Currency Kiosk Transaction to occur within the City.
Sec. 297.03. Exceptions. This Chapter does not apply to any business activity that is conducted without the use of a Virtual Currency Kiosk.
Sec. 297.04. Penalty.
(a) A violation of any provision of this Chapter is a misdemeanor under the Saint Paul Legislative Code section 1.05.
(b) Any Person holding a license to do business in the City, as well as Virtual Currency Kiosk Hosts and Virtual Currency Kiosk Operators, must comply with this Chapter or their license may be subject to adverse action consistent with Chapter 310 of the Saint Paul Legislative Code.
SECTION 3
This ordinance shall become effective thirty (30) days after passage, approval and publication.