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ARTICLE X. - VIRTUAL CURRENCY KIOSKS <br />Sec. 12-210. - Purpose. <br />(a) Virtual currency kiosks, or cryptocurrency kiosks, are a significant instrument in financial fraud <br />and scams. The Federal Bureau of Investigation ("FBI") reported in 2023, there were nearly 70,000 <br />complaints and $5.6 billion in losses due to virtual currency kiosk aided fraud and scams, <br />accounting for almost 50 percent of total losses relating to financial fraud. The elderly are <br />overwhelmingly impacted by financial fraud and scams perpetrated with virtual currency kiosks, <br />with losses reported for those over age 50 totaling $2.5 billion in 2023. The FBI reports that <br />criminals give their victims detailed instructions, including how to withdraw cash from their bank, <br />how to locate a virtual currency kiosk, and how to deposit and send these funds to the criminal <br />using a virtual currency kiosk (FBI 2023 Cryptocurrency Fraud Report). <br />(b) Criminals manipulate, intimidate, or threaten victims into using virtual currency kiosks to send <br />funds. In many virtual currency kiosk scams, criminals falsely represent themselves as <br />government officials or law enforcement officers to instill a sense of urgency and isolation in their <br />victims. Because the scams often require the victim to deposit large sums of cash, virtual currency <br />kiosks cause significant risk to public safety due to individuals carrying substantial amounts of <br />cash to virtual currency kiosks. <br />Criminals prefer using virtual currency kiosks for their transactions because of the anonymity, the <br />avoidance of third -party financial intermediaries validating the transaction and the fact that the transactions <br />are irrevocable. Criminal actors connected to the internet from anywhere in the world can exploit victims to <br />facilitate large-scale, nearly instantaneous cross -border transactions without traditional financial <br />intermediaries that employ anti -money laundering programs. <br />(c) In just the past few years, the Stillwater Police Department has experienced a drastic increase in <br />these scams and are particularly concerned about the high dollar amounts of these losses. <br />Currently, about 40 percent of Stillwater's population is over the age of 50. Since 2023, the police <br />department has responded to over 30 virtual currency -related scam reports from Stillwater <br />residents with over $156,000.00 of reported losses. In one report alone, a victim had deposited <br />over $5,800.00 into a virtual currency kiosk before the police department responded and stopped <br />the victim from continuing to deposit additional funds. <br />(d) The Stillwater Police Department has limited resources to investigate, pursue and prosecute <br />these types of criminal activities. In addition, these virtual transactions allow transfers of funds <br />overseas, thereby impeding the ability of any U.S. law enforcement agency to recover such funds. <br />