(TNS) — Sterling Heights city officials say they are taking steps to strengthen consumer protection by regulating for virtual currency machines.
According to a news release, the move would apply to virtual currency machines, including cryptocurrency (digital currency) kiosks and Bitcoin ATMs.
The Sterling Heights City Council is expected to vote on Tuesday, Dec. 2 on the ordinance to amend the city’s code of ordinances to add the new licensing and operational regulations.
Police Chief Andrew Satterfield said scam artists typically become more daring around the holidays, when people are districted and more vulnerable to urgent-sounding requests.
“This ordinance is a timely and necessary step to ensure our residents are better protected during one of the most high-risk periods of the year,” he said.
Older and vulnerable adults are often the targets by fraudsters using crypto scams but anyone can be victimized.
One 79-year-old Roseville woman made headlines earlier this year when she fell victim to con artist, who emailed her saying she had signed up for a home internet security system. When she called to cancel, the woman was told she would need to send them $7,000 from her bank account and more from a Bitcoin ATM.
She ended up losing more than $30,000 in the hoax.
Sterling Heights city officials said the city’s new effort comes at an important moment for safeguarding residents, particularly seniors, from fraudulent schemes.
The scams typically begin with an unsolicited message or call designed to create panic, pressuring victims into withdrawing cash and depositing it into a cryptocurrency ATM. Once converted, the funds are often irretrievable.
Sterling Heights police have had experience with the threat.
Of the approximately 27 cryptocurrency machines operating within the city, the Sterling Heights Police Department has investigated, or is currently investigating, 23 fraud cases tied directly to these devices.
Losses total more than $542,000, with seniors representing most victims. In response, the Police Department recently formed a “Crypto Task Force” to combat the crime wave.
The new regulations were developed by city administrators, police, and the City Attorney’s Office. The ordinance creates a framework that preserves access to innovative financial technology while enhancing consumer protection and public safety.
According to the release, the key provisions include:
* Licensing requirements, including having businesses with a virtual currency machine must obtain a city business license and a specialty license endorsement from the City Clerk’s Office.
* Operational regulations, including machines must require photo ID for transactions, display fraud warnings and disclosures, produce receipts and maintain a customer service hotline.
* Inspections and enforcement: The city may inspect machines prior to and after licensing to ensure compliance. Violations may result in license suspension, revocation or denial, and each violation constitutes a municipal civil infraction.
* Privacy and recordkeeping: Operators must maintain daily transaction logs and service records for at least 90 days.
City officials said the ordinance is being introduced at a time when holiday shopping, travel and charitable giving are top of mind by many residents. They urge residents to be vigilant against unsolicited calls, texts or emails demanding urgent payment, especially those requesting deposits via cryptocurrency kiosks.
“This ordinance gives us the tools to better regulate this industry and deter predatory activity,” said Sterling Heights Mayor Michael Taylor. “Our goal is to ensure residents can enjoy the holidays with greater peace of mind and stronger consumer protections in place.”
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