Vermont’s first bitcoin ATM has literally been unplugged after the state’s Department of Financial Regulation alleged that it was operated without appropriate money services licensing.
The ATM was located in Blu0Bin, a 3D printing startup in Burlington, and operated by PYC, which reportedly operates seven bitcoin ATMs in three states.
The story began back in November when a letter from the regulator, addressed to the proprietors of both businesses, warned that a license is required. Two follow-up letters made additional warnings, the latter stating:
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“Among other penalties, operation of a Bitcoin ATM in Vermont without a license could result in a monetary penalty of $1,000 per day. Given your October 25 start date, you are already facing an administrative penalty over $75,000. Additionally, knowingly engaging in a money services business without a license carries potential criminal penalties of a $10,000.00 fine plus up to three years in prison.”
In a recent discussion on the developments, PYC CEO Emilio Pagan-Yourno says he is compliant with FinCEN regulations for digital currency but did not obtain additional licensing apparently required by Vermont.
In a joint conference call with state regulators, Blu-Bin CEO Dan Riley and Pagan-Yourno say they tried to explain Bitcoin to the regulators. “They just basically went over what is Bitcoin, they didn’t really understand it. They don’t really understand what I’m doing, to be honest,” said Pagan-Yourno.
The said licensing costs $1,500; Pagan-Yourno says he has opted to leave the machine unplugged and has no plans on applying for a license which he believes is not required.