The Washington State Department of Financial Institutions issued a Statement of Charges against Digital Access LLC, alleging the company's digital currency kiosks charged consumers markups of up to 31 percent on the fair market value of digital assets per transaction. The markups were not appropriately disclosed to consumers and totaled more than $1 Million during a two-year period, according to the agency.
The DFI alleged that Digital Access violated the Uniform Money Services Act in multiple ways. According to the agency, the company created an environment of non-compliance with Anti-Money Laundering and Bank Secrecy Act laws, did not provide adequate risk-based controls to protect elderly consumers, lacked sufficient due diligence policies and procedures, failed to conduct adequate transaction monitoring, did not comply with federal and state reporting requirements, did not retain required records for Currency Transaction Reports, and did not correctly handle unclaimed consumer property.
Based on the alleged violations, the DFI seeks to revoke Digital Access's license, prohibit the company and its responsible individual from operating in the industry, order consumer refunds of all fees and markups totaling more than $1 Million, and impose a fine of $1,006,175 on the company and its responsible individual.
DFI Director Charlie Clark said: "Washington State regulatory requirements exist to protect consumers from unfair and deceptive practices. DFI will take action to seek restitution for consumers who are harmed by violations of the law and to hold companies accountable to operate in compliance with state law."
This is the fourth recent enforcement action by the DFI against a crypto kiosk company. Digital Access and its responsible individual have the right to request a hearing to contest the charges. If the DFI enters the order for consumer refunds, the agency said eligible consumers will be contacted by Digital Access, and the DFI will monitor the refund process.