House committee substitute amends the 2nd edition as follows.

Section 1.

Modifies new Article 26, “The Virtual Kisok Consumer Protection Act,” in GS Chapter 53. Adds dollar and prevailing market value to the Article's defined terms, and makes technical changes to the definitions of virtual currency and virtual currency kiosk. Amends the definition of spread to specify that the term applies to charges to the customer to buy, sell, exchange, swap, or convert virtual currency at the time of the transaction. Specifies that virtual currency kiosk operator does not include a business location, property owner, lessee, or other person that provides space for a virtual currency kiosk manufactured or distributed by a third party. Deletes from the defined terms FDIC or Securities Investor Protection Corporation.

Rather than deeming information and reports obtained by the Commissioner of Banks (Commissioner) for the purposes of virtual kiosk operator compliance not to be public records, provides that the records are subject to confidential treatment pursuant to specified sections of GS Chapters 53 and 53C.

Specifies federal preemption is limited to express preemption.

Establishes a new requirement for virtual currency kiosks to implement an interactive fraud-screen process that includes four components, such as required time the fraud screen must remain visible and a prohibition of the ability to bypass or accelerate the fraud-screen process. Regarding disclosures before virtual currency transactions, refers to associated charges (was expenses) and removes a statutory cross-reference to a defined term.

Enacts a new section of the Article to prohibit kiosk operators from enabling a customer to access, authenticate, or log in to an interface through a scan-based mechanism such as a QR code. Limits customer authentication to three alternatives, including manual entry of a verification code sent to the customer. Mandates that kiosks disable or block a camera, optical reader, or scanning unless required for identity verification and expressly authorized by law and approved by the Commissioner. 

Changes live customer-service requirements to instead require, at a minimum, live customer service at all times the operator's virtual currency kiosks are available for public use (was Monday through Friday between 8:00 a.m. and 10:00 p.m.).

Increases the daily limits imposed to $2,000 (was $1,000) for new virtual currency customers and $7,500 (was $2,500) for existing virtual currency customers.

Modifies qualifications for a refund of the amount deposited into a kiosk, limiting refunds to new virtual currency customers and requiring that the person have reported the fraudulent nature of the transmission to the Commissioner within 30 days and the Commissioner finding that the transmission was fraudulent. Under the same criteria, existing customers are eligible for a refund of transactional fees. Caps fees at 14% of the dollar equivalent of the virtual currency involved in the transaction (was 3%).

Enacts a new section to establish a mandatory 48-hour hold on all transactions initiated by a customer whose first transaction occurred within seven days. Sets forth required actions for the kiosk during the hold, including notice to the customer. Prohibits early release from the hold and specifies that the hold is specific to initiation of each transaction when multiple transactions are initiated.

Adds new authority for the Commissioner to assess a civil penalty of up to $1,000 for violations of the Article, and up to $5,000 for subsequent offenses.

Specifies that the operation, ownership, leasing, or management of virtual currency kiosks without conduct that facilitates or induces a transaction does not constitute a crime under the Article.

Replaces language relating to local government regulation. Now allows for local government regulation pursuant to GS Chapter 160D so long as not expressly preempted by the Article. Authorizes regulation as a distinct land-use category via three alternatives, including absolute prohibition. Requires uniform application of any zoning regulation adopted pursuant to the section. Requires liberal construction of the section in deference to municipal authority to regulate land use, public safety, and community planning.

Makes technical, conforming, and organizational changes.

Section 3.

Specifically directs the Commissioner to adopt a procedure for determining when a transaction is fraudulent by December 1, 2026, in addition to other implementing rules.