Vermont Legislature SmartTranscripts:

[Michael Marcotte (Chair)]: Good afternoon, everyone. This is the Vermont House Committee on Commerce and Economic Development. Again, Tuesday, 05/12/2026 at 02:05 in the afternoon. We're back from a short break, and we have Eric Fisherman with us. Mister Fisherman, good afternoon. Thank you for joining us.

[Ari Fishman (Owner, ZenBarn)]: Hi. Thanks. So if

[Michael Marcotte (Chair)]: you could state your name and your affiliation and continue on with your testimony.

[Ari Fishman (Owner, ZenBarn)]: My name's Ari Fishman from Waterbury, owner of Zen Barn, and giving example of a we were victims of of a fraud with one of these kiosks. It was definitely put our business in a very hard position, and it was an interesting fraud, I think because. It played on a, you know, an employee that wasn't. Old, you know someone you would think is in the demographic of knowing better, know, management level educated. Guessing their age was, you know, probably forties, late thirties, late forties, sometime in that range. And then basically, I can run down the. What happened they played on, you know, the scam was, you know, somewhat sophisticated, I guess. And then I think also just some. Ways it worked out between communication with employees worked in the scammers benefit to make it more believable and made me really see how these things can get carried away. There was a phone call to our front desk saying, hey, this is a. You know, a purveyor for our business. We need to do a delivery at seven, but we haven't got the money yet. I'm here with the owner. And the owner, know, and someone said, it's it's it's me. My it was my brother. You posing as my brother to the front desk person. We gotta get this guy paid so they can do this delivery. I'm in a bad service area. I'm gonna call you from WhatsApp. So then that communication was then relayed to the manager. Hey, the no one's calling you something urgent. He's gonna call you on WhatsApp. So I think that barrier of maybe if the manager got the original call, they would have said, oh, this is weird. What's up? What's going on? But that it came from another employee that sort of had already maybe verified that to them. Oh, look. I already I know this is Noah. Great. It was a new employee, but still. So anyways, they get handed. They start communicating through WhatsApp. There was a picture that was just, you know, stolen from social media, but made it look like a more legitimate account. And start creating, hey, we just got to get this person this money, and then there was a whole bunch of back and forth and then started creating sort of the urgency and getting the person worked up, and to the point where they emptied our safe, took all the cash, drove to the crypto kiosk, and sat there after hours at seven or eight or night feeding $6,000 bill by bill into a crypto machine, you know, that we to never be seen again. And the person was, you know, very upset afterwards. We didn't you know, we were very understanding, but they were so upset, you know, within a week they ended up resigning their job, went on later to kind of disparage us because they were so upset about how they felt about that situation that they were put in that position. So it had fallout beyond just the the money. And, so that was that was sort of the gist of it. And, you know, as you when you went back and broke it down, we're talking to that employee. They're like, yeah, wow, I can't believe I fell for that. I can't believe I never just called you guys on the phone, you know, and asked, is this really you or called, you know, the brother or another employee to, like, get any sort of verification, but the way they they built up the sort of urgency in in getting the, you know, the blood pressure and the emotions involved so people aren't thinking clearly. You know, in hindsight, they were at the employee was just couldn't believe that they actually fell for that. You know, at one point they the person posing as as us as the owner was swearing at them and in a way that we would never talk to them, but they were so emotionally distraught at that point that it just added to that that situation. And just, you know, just kind of hard to imagine someone driving an hour out of way at eight at night to a vape shop and piling money into this like random machine. But you know, it happened.

[Michael Marcotte (Chair)]: So you went through that. Questions for Mr. Fishman, Tony?

[Anthony "Tony" Micklus (Member)]: First of all, thank you very much for coming forward. I know how hard this can be sometimes when you're dealing with situations like that. Now, are you you're a Vermont company?

[Ari Fishman (Owner, ZenBarn)]: Yes.

[Anthony "Tony" Micklus (Member)]: And what where did you go? Where where did your employee go for the crypto?

[Michael Marcotte (Chair)]: This was in this was in

[Ari Fishman (Owner, ZenBarn)]: Williston. Okay. Sure. The exact place. We contacted them afterwards, and they were just kinda like, not our problem. That was Right. The end

[Anthony "Tony" Micklus (Member)]: of So you you attempted to contact the cryptocurrency operator, and they told you it was not their it was not their problem. Right. Okay. Thank you.

[Ari Fishman (Owner, ZenBarn)]: You know, they just sort of made it sound like it was it was that thing sits in our place. You know? It was the business.

[Anthony "Tony" Micklus (Member)]: That was the business. Did did you reach out to the cryptocurrency operator? Not not the business, but the people who put the machine in there.

[Ari Fishman (Owner, ZenBarn)]: No. I I just sort of felt like there was, you know, I I have crypto. I I you know, once it's I didn't we looked into it a bit. It didn't seem like there was any recourse for us.

[Michael Marcotte (Chair)]: You touch base with law enforcement at all.

[Ari Fishman (Owner, ZenBarn)]: Believe so. I believe we did, and I think they just said yes, sorry, not you know we must have because we were. I mean it was a significant amount of money and we would have liked to recoup it, but I didn't. We we explored every avenue we thought we could and and there wasn't, you know, we tried insurance. Tried, you know, there just wasn't a whole lot there like, hey, you you did it. They had access to the money. They put it in. You know, nothing we can do at this point.

[Herb Olson (Member)]: Yeah, thanks. Thanks very much. I think that a representative asked you about, do you actually contact the operator of the kiosk? I think you said something, you left her the impression that it was nothing you could do. Did he ever ask for a

[Michael Marcotte (Chair)]: refund or anything like that?

[Ari Fishman (Owner, ZenBarn)]: Yeah. We, you know, we, it was the first I'd ever heard of these. Yeah. And, you know, we contacted the store and, and, you know, and they just gave us no. They didn't help us at all. The guy just kind of said. Tough luck. I had nothing I can do. And there was and we were trying to get our money back. We tried. We contacted. We did contact the police. We contacted our insurance. We, you know, we thought there might be some avenue to recoup something. You know, after it, it pretty quickly felt like there was there wasn't an avenue.

[Herb Olson (Member)]: Thanks for thanks for your time to talk to us.

[Michael Marcotte (Chair)]: Any other questions for mister Fisher? How long ago was that?

[Ari Fishman (Owner, ZenBarn)]: That was 2003 '23. October '23. Three years ago. So, yeah, if there ever is some refund thing, definitely let me know.

[Michael Marcotte (Chair)]: Sure. Anything else? Great. Thank you for taking the time to speak with us this afternoon. We appreciate it.

[Ari Fishman (Owner, ZenBarn)]: Alright. Yeah. No problem.

[Michael Marcotte (Chair)]: Anyone else? Speak to us. Ethan?

[Ethan Muglothin (Department of Financial Regulation)]: Thank you. Ethan Muglothin from from DFR. Just wanted to respond to a couple of things that were that were said today and, you know, give you, you know, an opportunity to ask us any questions that that you might have. You know, I guess the first thing that I just wanted to to point out, there have been, you know, several bills around the around the country enacted that include provisions that are somewhat similar to what's in the Vermont bill. I did want to make sure that you are aware that certainly since our bill was enacted, and I think all in 2026, six states have moved toward outright bans. The states are Indiana, Tennessee, and Minnesota, which I think Aaron might have mentioned mentioned last week. Minnesota is an interesting one because they had some similar protections to what to what Vermont had. They had a transaction limit, daily transaction limit, And they did have a refund provision, although much less expansive than ours. But they had a lot more machines in their state, and they had a folks testify about there still being a lot of fraud in the state. That's how they made their decision. I don't believe that Tennessee or Indiana had a comprehensive regulation in place with respect to kiosks before enacting their bans this year. So that is one change when we're considering when you were considering the bill last year. No states had moved to to enact bans. They're just states considering that. You know, one thing we do know about the the frauds that are sort of where, you know, the victims are are tricked into using these machines to these fraudulently induced transactions is that we know reporting rates are are low. Consumers are are, you know, often often embarrassed. Not all of the frauds involve huge amounts of money. Like the easy pass fraud text you probably get weekly. That's not a $20,000 fraud, but there are a lot of those. It certainly does happen. And there are a lot of frauds that extend over long periods of time. Unfortunately, investment frauds are one of those sorts. They often start with a romance scam where they develop some sort of relationship, and then there's some investing in a product over a long period of time. And those tend to have the highest losses. And they go on a really long time because customers think they're making a lot of money. They think they've made the investment of their life, and they're just moving more and more of their savings over to it, typically, you know, very, very gradually, but they don't find out about it until they there's some catalyst that causes to withdraw. And then they say, woah, you know, in order to withdraw, you've got to pay an extra 10,000 of taxes or something like that. So there can be a long tail on when these things get reported, and there's a lot of inconsistency in terms of how they get reported to who and what gets disclosed. They heard that the owner of the business didn't necessarily occur to him that the person to contact would be the operator of the kiosk. He's contacting the owner of the store, contacting local police, but it's not always coming through to folks that fully can inform them about their remedies and help them. And I think we knew that was a limitation of the statute last year when it being considered. But, you know, I'm not I don't think it's it's certainly not our belief that, you know, no illicit or fraudulently induced transactions are are happening and or that our, you know, statute is so so effective that it's eliminated a 100% of them. So in some ways, it's disappointing to hear that there haven't been more things that have that have come up. And I see if I had anything else that I wanted to mention based on our our discussions. I think that I think that covers it. I'd be happy to answer any questions you might have. Any questions for Ethan?

[Edye Graning (Vice Chair)]: On the stakes that banned the kiosks, was it an immediate ban? Do you know when those bans went into effect? Was there a time period? How did that do you know how that worked?

[Ethan Muglothin (Department of Financial Regulation)]: I believe they had immediate effect. I don't know off the I can't say that with absolute certainty. I know in Minnesota there were some provisions to make sure that customers that had money sort of where the kiosk was holding custody of customer money, that they'd still be able to get that money back. I don't think that's an issue in Vermont because I don't believe Coinflip holds custody of customer funds. But Mr. Lipka could confirm that for you.

[Edye Graning (Vice Chair)]: I'm just wondering if there's something if we do move forward with a ban, I'm curious if there's a step that we might need to do in the process, and I just don't want to miss that. So that's my

[Ethan Muglothin (Department of Financial Regulation)]: I think anything that we thought would have been necessary would have been in the legislation, which we'd draft it at your request, not as a DFR proposal.

[Herb Olson (Member)]: Yeah, it's just one part of the text that the So you drafted it at page 16, it has a provision saying that for transactions occurring after July 1 in violation of this section. The operation provides full refund to the customer. So I guess two questions. Is that a full refund for the customer if they notified within ninety days? Or is it more than that?

[Ethan Muglothin (Department of Financial Regulation)]: We had sort of a funny situation here, and I'll tell you what we're trying to address with that paragraph.

[Herb Olson (Member)]: With the effective kind of thing that

[Ethan Muglothin (Department of Financial Regulation)]: It has the ban going into effect. We didn't couldn't get rid of all the existing language. Because if a customer was fraudulently induced into a scam transaction the day before the ban, you would still want them to have their ninety days to report it and to and to get their refund. And then we realized we were in this sort of funny situation, right, where if they kept the machine on the next day, well, our thing that entitled them to that to that refund, you know, had sort of stopped. It was only, you know, applying to things before the before the ban. So didn't think we should ever be in a situation where if someone was violating the the ban, that they would be in a better position than a kiosk that was operating legally before the ban went into effect. So I think what we ended up saying is that, yeah, if you violate the ban, you're still going to be subject to all the administrative penalties and all the other things under Vermont law. But, you know, you have to give a full refund. It's not time limited. And I think the general requirements of that are are less less restrictive. I think, you know, I believe the commissioner can can order it. I don't have the the language in in front of me, but the the thing there was that if the legislature decides to to enact a ban, it shouldn't result in a situation where customers have less protection if someone violates the ban. So we made it so that they would have more protection. It's just you violate this ban and someone uses it, and they get scammed You know, they have they have full refund rights.

[Herb Olson (Member)]: Yeah. I see. So I get it. It's so if a transaction occurs after the ban through July 1 to the twenty sixth, That's what's driving. It's not just violation of the sanction, it's in violation of the provision of the new law that ban.

[Ethan Muglothin (Department of Financial Regulation)]: Yeah, in violation of the ban. So it might not even have a requirement that it'd be fraudulently induced. Might be there. They're entitled to a full refund if they violate the ban and they're operating a kiosk in Vermont.

[Herb Olson (Member)]: For for who we find no question.

[Ethan Muglothin (Department of Financial Regulation)]: Yeah. So that is a provision that we would hope would never come into effect because so sorry. I've gotten a little more information on the bans. The Indiana ban was immediate. Tennessee ban goes into effect July 1, and Minnesota, August 1. So there was a delay on that. Thank you, Joe.

[Jonathan Cooper (Member)]: Immediate seems interesting. Immediate seems like there was an emergency or something like that. It's in the middle of the legislative session.

[Ethan Muglothin (Department of Financial Regulation)]: You know, I don't immediate upon it, yeah, being being passed into law.

[Michael Marcotte (Chair)]: They're required to wind down. Questions for Ethan? Great. Ethan, thank you. Maybe start with the discussion. I think we should discuss the key op creeds first before we decide on whether or not we agree with the who sent a proposal of the meddling and then because that'll have a bearing on what we do. So there's two proposals. There's the Senate proposal of amendment, is to extend the moratorium for one more year. There's also a proposal in 1.3 that would ban the kiosks in Vermont, so discussions, thoughts?

[Herb Olson (Member)]: I've never been a fan of the way these transactions work. I think they're right for people who wanna scam people out of the money, makes it just really easy. I think we did as much as we thought we could last year. I was never convinced that was enough really to protect consumers who get themselves in situations like Mr. Fishman and maybe some other people. And I'm trying to think of ways you could make it better. I floated the idea of absolute liability that might have some issues too. I guess I'm comfortable with, of the two choices, rather than just trying to mend it to make it stronger, don't, as Ms. Kirk said, I don't think the benefits for the public outweigh the risk.

[Edye Graning (Vice Chair)]: You talk louder, so the people over there can hear you too.

[Herb Olson (Member)]: What? What I was saying was that I'm not a big fan of these transactions.

[Abbey Duke (Member)]: I think they

[Herb Olson (Member)]: impose just the nature of it and how quickly it can all work. I think it exposes consumers to a lot of risk. I think there are So, agree with Mr. Curtis that I don't think the benefits outweigh the risks. I wasn't a big fan of these kinds of transactions last year. And nothing that I've seen really have changed my mind on that. So I certainly It's kinda like reconsideration time, and upon reconsideration, I just sit down.

[Jonathan Cooper (Member)]: Jonathan? I don't see a reason. I don't agree with that. And I think that it's important to hear the testimony that what happened when things go wrong, they go very wrong. The testimony the we heard about, like, one issue and they caught it, strikes me as indicating that the guardrails matter. They can make a difference. And so I don't have a major I mean, I don't see myself particularly utilizing that service, but I also don't see myself needing to eradicate it from the state. So I don't really know why people like it, but some people like it. And, I haven't seen it. I had I was really alarmed by this stuff last year. I'm really glad to hear that some that of the transactions that took place in Vermont, The one example, I think, of where someone was like, I'm gonna call and talk to them. It's like, they didn't even they still hadn't held the transaction. Was it just went right back to the the to the consumer, which I think is consumer protection. And that's how it feels. That's what it seems like to me. And I'd

[Michael Marcotte (Chair)]: I'd like

[Jonathan Cooper (Member)]: to protect consumers and not make too many choices for them.

[Kirk White (Ranking Member)]: I come down on the side of Jonathan. I think all his stuff is just like my VCR. I depend on my kids to help me navigate through it. But, I think we've had these protections only in place for ten and a half months. It sounds like they're working. And if we do ban it, the scammers are still gonna adjust and adapt and find other avenues that are not protected. And if we can stop some of these by having what seems to be somewhat robust protections in place, that seems to me to be a good thing. So I think we ought to at least give it another year and and see what the numbers show up. I think all the data that we're getting reports on are, like, 2024 and earlier. So I'm not sure it's been a true test of of the protections we have.

[Anthony "Tony" Micklus (Member)]: So I was already banning these things with that report from, but then I found out it was 2023 before we had these policies in effect. So I'm very I'm still struggling with this very much. You know, I believe that there is a that businesses should be able to do business any way they choose as long as it doesn't hurt the consumer. But the question is, is this hurting the consumer? And, you know, think about that situation there and what if they knew that they could get a refund? Would that have made a difference? You know, that he would have gotten his money back and things like that.

[Michael Marcotte (Chair)]: So,

[Anthony "Tony" Micklus (Member)]: I don't know. I'm still struggling. I guess I still need, I need to hear from some of the other people here. I'm very much on the fence with this. The other side of this is that I do have a hard time buying, I think about, you know, I know, Monique and I talk a lot about privacy and privacy hops and things like that. And I I understand that around a crypto wallet, but if you're having to flash a QR code in order to access that wallet, you're having to use technology, and you're having to be connected to the Internet. So I have a hard time reconciling that in my mind. And the other thing that bothers me is we know that a large percentage of these things go unreported. I've mentioned I have a relative myself who was a victim of a romance scam, And I was given there's a a significant relative of mine, and I was given very strict orders not to tell anyone because they were so embarrassed by what that they had been had. So I'm still weighing those things out. So please, others, continue.

[Edye Graning (Vice Chair)]: So what I heard from the Zen Barn is that they reached out to two different people to report it, and neither of those avenues would have gotten information to us. So they did not reach out to CAB. They did not reach out to DFR. They did not reach out to the crypto provider, the unit provider. And so we in this room would never know about that. And how many other of those situations are we never going to hear about because the information just isn't going to one place. And so we are getting reports from a person with a vested interest in keeping the kiosk here on what has been reported to that person or that company, which may or may not be the real picture. Not saying they're not telling the truth. I'm saying they may not even have those reports to them. And so this is so murky. It doesn't feel good to have murky businesses legal in our state. And that's my difficulty with this.

[Anthony "Tony" Micklus (Member)]: And just to add, I am in no way questioning the data that we've received. I believe that that data is accurate and real. Correct. Kind of with

[Emily Carris Duncan (Member)]: Tony and Edye, I guess. Guess I'm leaning more towards ban because of lack of data and how, again, respecting the testimony we got, but feeling like there is so much unreported stuff. I was just saying when we were on break that I don't know how many scam texts and things and phishing stuff that I'm getting all the time that I'm not reporting because I'm not going to take the time. And even if I did and I have fallen for stuff way back before we started having to privacy And also, like, personal experience with crypto wallets and things like that is like, is very technical. And then it's like, it's also attached to my, it's been attached to my bank account. And I move that money if I've needed to. Don't believe me, I'm like a tiny bit amount. So I'm playing around with it. But to experiment with it. And that feels like normally how I'm using, I think I would much rather be for myself, it feels less risky to be tying it to, I guess, the trusted sources that I have with my relationship with my bank and somebody else is watching that and stuff like that. And it does feel like there's this gray area of the Zen Barn not knowing who to report to, not the owner that has the kiosk in there, not knowing what the protocol was was concerning, I am just so doubtful that people are actually reaching out to the AG. It just seems like there's more risk there than benefits.

[Jonathan Cooper (Member)]: Jonathan? I I mean, it'd interesting to see what a a coin flip receipt looks like. Does it say what to do? Does it give you an I mean, like, what is it telling you? I don't it's too late to look at what the receipt was from 2023. I do wonder, in some ways, if if the things we're doing one of the challenging things is knowing, okay. If you're doing it well, what feedback are you gonna get that you're doing anything at all? Like, we how will you find out? And I think that's something that we we struggle with in a lot of different ways in the realm of policy making. Like, how do you know you're

[Michael Marcotte (Chair)]: doing a good job? Or

[Jonathan Cooper (Member)]: is that evidence that something's going well, or is it evidence that no one's telling you about the things that are not going well? And a lot of the choice that we make about that interpretation, I think, maybe is what we bring to that is the eyes we bring to to that vision. You know, I wonder if there's things that we can do about that. So people what is the protocols? And if there's this seems like a good time to jump on that if we want to because there's just two. So, you know, now, I mean, I was interested to look at some of this stuff where there were there were over 900, I think, in Indiana. I mean, it's like, oh, there were a ton of them. And the horse is out of the barn. What can we do? Alright. There's two here. Maybe this is a good time to to shorten to have a procedure that does mean that any entity that's hosting one, the person on staff has to know to say something. I mean, I'm I'm not really sure what the deal is, but maybe there are some things we can think about because we're kind of all the way down to the ground floor of that proliferation within the state. I don't recall what what the number of kiosks was prior to the moratorium or prior to the tightening of the legislative situation. Was it in the dozens? Was it do you anyone happened if anyone in the room knows how many kiosks there were in Vermont.

[Michael Marcotte (Chair)]: Don't you? Three memory? No problem. The exact number, probably,

[Ethan Muglothin (Department of Financial Regulation)]: it was over 70.

[Jonathan Cooper (Member)]: Oh, okay. So it was a lot big many more than we have now. Essentially. Do have a copy of

[Joe Lipka (CoinFlip representative)]: the receipt. Just asked the team to send it to me. If you'd like to look at it, tell you that to report our fraudulently induced transaction, call us at this number or email us support. Also, report a fraudulent transaction to the FBI's IC3 complaint center for victims of fraud to contact the Robotatory General Assistance Program hotline. So we're telling them on the receipt to call us, to call the FBI, to call the AG's office. So it's very hard to understand that the facts are the facts, right? We're telling them to call us and telling us to call these people. So we're telling them what to do. In 2023, that was happening.

[Ethan Muglothin (Department of Financial Regulation)]: Mr. Lipa, can you confirm that that's what their receipt said throughout the period since the law was

[Jonathan Cooper (Member)]: passed? I think so. I

[Joe Lipka (CoinFlip representative)]: asked for a copy of receipt. Got it in like five seconds, so I can definitely check. I did not see that before the law went into effect because it did not have a paper receipt in quarter, but now it's paper and text message.

[Abbey Duke (Member)]: I think I'm also on the fence here a bit. I think, like Tony said, I But I also am very concerned about the potential for underreporting. I think although we can Instructions are on the receipt and that doesn't necessarily dictate that people are going to act rationally within their shame if they are feeling deep shame around their finances. So I do feel really very concerned about that. I am also curious, though, because we only have about ten months of data, if it makes sense to have another year to get a better sense. But even with that, are we still going to run into an underreporting situation?

[Monique Priestley (Clerk)]: I mean, certainly, I think at very minimum, the continuing volatility, but I keep coming back to this, which is that even Bill Gates in 2025 talked about how cryptocurrency requires a certain amount of sophisticated knowledge and thinking in order to really do that system in a safe, effective way. And then what we're providing with crypto kiosks are easy access, doesn't require any sophistication to operate except for to put the money in. And so it seems to me like it's a tool for the people who don't have the sophistication to use the tool, which is why it's a perfect scam device. And so, I mean, I could live with a more exciting moratorium, I could do that.

[Anthony "Tony" Micklus (Member)]: Can I just, maybe this can help us as a, maybe, Let's say for the sake

[Michael Marcotte (Chair)]: of argument, we were to put another one year moratorium?

[Anthony "Tony" Micklus (Member)]: Is there a path to guess? I mean, what are we gonna do in 2027? Are we gonna kick it down the hill, get it down for another year? You know, what are we expecting? If you say we do put that moratorium, what are we expecting? Is more data really gonna help us make the decision? And on the other side, if we do put a ban on, we can always repeal that at any time. You know, we're here five months out

[Jonathan Cooper (Member)]: of the year. More data would allow us, I think, to see if I I don't know when we get over the like, when do we come when are we cool with what we know? But it does feel like, is there well, because people adapt to schemes adapt. Scammers adapt. So are the safeguards that maybe seem to have a really good return right away, then it's like you come up with a name with your with your password, and then you add a couple years later, you gotta add in a special character. A couple years after that, you need to add in you know? And so the thought is that maybe we'd see some natural motion in efficacy, and we need to respond in some way. But it does I I I am I don't know. I I can imagine that if it was something that that's just ten months, as representative Carris Duncan has pointed out, we may feel more confidence or comfort. Right? And but it it is gonna be it's gonna feel a little funny if we have I think the moratorium extension makes some sense. It's also the case that if we just have two in the state, if you don't live near it, you're probably not doing too much with it. And so it's not, like, something that we're gonna become acclimatized to because that's that's not gonna be a part of my circuit living in Powell. There's one in Brattleboro, there's one in Essex Junction.

[Anthony "Tony" Micklus (Member)]: Because it's an Essex and I would probably. Yeah.

[Jonathan Cooper (Member)]: Did mean that it the saturation doesn't take place where you get you see them around, So which also creates a level of comfort. At least in this way, we won't be overwhelmed by that.

[Michael Marcotte (Chair)]: I think the only way you're really going to get the data that you really want to better understand is that you don't have a moratorium on it. You have more machines coming into the state, will give you information you're looking at home.

[Abbey Duke (Member)]: I mean, I think that's also the other side of the system adapting to it. It's like, if operators learn to adapt to our rules, then do we see them rolling out and proliferating? Protection, everything is helping. We also know that it doesn't necessarily go as far as it

[Jonathan Cooper (Member)]: I mean, the the rep Olson, your perspective on the what was the term for, like, the liability? Like, a long a very long period of time at which one could receive a refund?

[Herb Olson (Member)]: I call it absolute liability. So it's just liability without a lot of the limitations that are in

[Jonathan Cooper (Member)]: grant funds. It does seem like digitization leads us to think in those very long tail kind of time frames. It does I I feel like there's not a lot of, durable goods purchases that one could hold under at that sort of

[Herb Olson (Member)]: Actually, there are. There's only more. Yeah. Yeah. No. There's certain gosh, there are, I'm struggling to come up. There are certain devices or appliances or whatever that someone helped me and it's losing it. But there are certain products where the law says the consumer really isn't gonna be able to, even with disclosure, whatever, they're not really gonna be able to make that determination as to whether it's fire, whether it's what the risk is. And so they pose absolute liability on the producer of the good. And the

[Jonathan Cooper (Member)]: challenge is, again, the producer of the good or the the I don't even know what the how to think about the role of a kiosk. Is it is that the good or is that the medium?

[Herb Olson (Member)]: Well, it's a service. It's a service. But I think you go to it as a liability when the producer of the product or the provider of the service is really the only person who has enough information, potentially information, and the ability to make a difference as opposed to the consumer.

[Anthony "Tony" Micklus (Member)]: I think it was a car seat.

[Abbey Duke (Member)]: Yeah, I was thinking about Thank the

[Herb Olson (Member)]: you. I know there are certain types of products where the consumer isn't going to be able to figure that out. Also you factor in, I think, the magnitude of harm that might occur. Plus, the producer has the ability that's a good question. Mean, I think we heard testimony last year that when I raised that issue that the offerors maybe didn't have as much knowledge about investigating, knowing in real time what the scammers were. But I think we also heard that, and I think we wrote into law that they were going to be required to hire somebody independent to try to suss that out a little bit so that they would be able, at least to a great extent that they are now, to identify potential you know, scans. But I think that kind of underscores where I'm coming from that they're probably the only ones who can really do that. I don't know enough about the technology to know how they would do that, Tony, but.

[Anthony "Tony" Micklus (Member)]: And this is this is part of the problem. So that that's really a nuclear it's like an arms race. Yeah. You know, we are constantly trying to outsmart the the hackers, and every month, they come up with something new. So I think a very big ask, if not possible, to think that any, even cybersecurity companies struggle with this.

[Herb Olson (Member)]: Yeah, I get what you mean. And I think that was some of the testimony last year too, that the notion of putting the entire liability on the kiosk operator probably wasn't feasible, which is then why I go to the next step was, well, if they can't do anything about it, is this really something, a mechanism that we want to

[Michael Marcotte (Chair)]: So what we wanna do?

[Herb Olson (Member)]: You want a motion?

[Abbey Duke (Member)]: I mean, I guess the Tony's point, if

[Herb Olson (Member)]: we give them, that makes

[Abbey Duke (Member)]: them always appeal to them.

[Anthony "Tony" Micklus (Member)]: But if we we send them moratorium, we can gather more

[Michael Marcotte (Chair)]: data. Which is the problem is Kiosks. In kiosks. How much more data you're going to actually get. A valid point. The point that I think I made is that you really want data, really understand what it's doing, how it works in Vermont, is to take the moratorium off and allow more kiosks in the state to see how the regulation works. Or if it doesn't, is that something that you won't gamble with,

[Anthony "Tony" Micklus (Member)]: I guess.

[Edye Graning (Vice Chair)]: Or must national data. Or you look at the states that don't have regulation, and you look at what's happening there, you have all kinds of data on that and how that is not working.

[Michael Marcotte (Chair)]: I

[Anthony "Tony" Micklus (Member)]: agree. Also a very valid point. I mean,

[Jonathan Cooper (Member)]: that is not working. I would be to what extent is what the operator within the state doing now to what extent are their protocols because of the existing legislation within the state. The closer it gets to that, the the the closer that alignment is, then the more we can have some assurance that if there were to be the removal of a moratorium, we would see a replication of that DNA, you might say, as opposed to other approaches, and that would be instill some confidence in my end. I mean, I think it'd be less if the entities that left of the 75 other kiosks, not all of them would wanna come back, I don't think, unless they felt like reaching an elevated threshold. Do I have that right? That the legislation is a little more particular now than it was when they left the state? So I don't know if all of them would wanna come back, but it's like Can we do, like,

[Anthony "Tony" Micklus (Member)]: a parody thing? I'm just asking. Here

[Ethan Muglothin (Department of Financial Regulation)]: we go.

[Jonathan Cooper (Member)]: I'm I mean, I I don't feel prepared to remove a moratorium today. My preference is to extend it by a year and to then revisit this. Admittedly, not a perfect amount. But as soon as there's many more entities operating in here, we'll have many more individuals talking to us about it, and it might get even harder to filter out the noise. We have a limited amount right now because we have a limited presence in the state, which I You have a moratorium, so can't let any more in. I am yes. That's right. And so, I mean, I do feel like between guess last year's, what we did last year hasn't had enough time for me to feel comfortable removing the moratorium. I don't know why I'm being gun shy about it, but that's just my hatred. I don't I'm not really ready to pull that

[Michael Marcotte (Chair)]: up, pull the cap off.

[Jonathan Cooper (Member)]: But I could be convinced if other people wanted to give it a whirl.

[Edye Graning (Vice Chair)]: I just go back to where we started. We started this conversation, which is when people want to buy crypto, they have many options. And the kiosks are an option that are much more often used for either illicit or fraud than other ways. And that is data that we have seen from, not from our data, but national data. I reread the report from DFR. I didn't love what I read. I don't see how it benefits Vermonters or Vermont businesses. And that's the piece where I

[Abbey Duke (Member)]: we're not

[Edye Graning (Vice Chair)]: comfortable, we're not comfortable. I don't see the benefit. So that's really where I'm weighing here.

[Jonathan Cooper (Member)]: What is an example of what are some industries that we have banned in Vermont in the last, I'm just curious what else we've done that to.

[Edye Graning (Vice Chair)]: Well, and this is a conversation we had a couple of years ago. I don't remember if it was this exact makeup of a committee or not, where no one else had banned it, but three states have now banned these because they don't see the value. It was us in Connecticut, I think, at that time who were putting regulations in place. It's somebody else who can tell you the things that we've banned here.

[Herb Olson (Member)]: This is going back a ways. It wasn't a ban per se, but it's hard to imagine that thinking about health insurance, and going back to the naive. And it used to be that health insurance companies would accept the policy or deny policy for really any reason or value that is involved. And then if they accepted you, they could charge you whatever they wanted to. None of the sort of band aid that we think about now guaranteed issue kind of stuff. And when that went into, when those laws went into effect, there were some companies whose business model just didn't and they were effective. And I think the reasoning was they were water. I think the sort of construct was that these products were so harmful to the general public, that even at the cost of really sort of banning the business model, it was better for society at home. That's going back for me.

[Michael Marcotte (Chair)]: I will

[Abbey Duke (Member)]: also go ahead and say that billboards. Billboards? Yeah.

[Anthony "Tony" Micklus (Member)]: There's been a couple of four names. Nuclear power? It's right, nuclear power. Hydraulic fracking.

[Jonathan Cooper (Member)]: Hydraulic fracking? Okay.

[Anthony "Tony" Micklus (Member)]: And some of the more intense wheat products. It's true.

[Abbey Duke (Member)]: We do have some wheat on our wheat.

[Ethan Muglothin (Department of Financial Regulation)]: Yeah.

[Jonathan Cooper (Member)]: It feels like a big deal.

[Abbey Duke (Member)]: And

[Jonathan Cooper (Member)]: I know that we can repeal things at any time, but it just it just seems like there's a there's a rue of con.

[Abbey Duke (Member)]: I think that

[Michael Marcotte (Chair)]: when you go to the the extent where you're banning something, you're looking at the public safety and publicly. So does this mean that lovely.

[Abbey Duke (Member)]: I think it's just going backwards. I mean, not to say that that's particularly on the table, but I'm just trying to think, if you don't go forwards or if it just sort of languishes here, It's not Yeah, like we're moving it, going backwards, going to a system where potentially it could fracture and more companies could be let in. I don't know if I'm comfortable this not being successful.

[Michael Marcotte (Chair)]: Well, I guess, I look at it too. What data will we gather that make us change our mind one way or the other next year. So do we then go for another sunset, extend the sunset for another year, and then another year? Is that fair to the business? No. If they're operating at the moment now at a loss, you're only going to do that for so long.

[Edye Graning (Vice Chair)]: Do you do do see one, or do we wanna sit here in silence?

[Jonathan Cooper (Member)]: Who's enjoying a silence for once?

[Abbey Duke (Member)]: Okay. I've got too much noise.

[Joe Lipka (CoinFlip representative)]: Or you could just make a motion.

[Michael Marcotte (Chair)]: So okay. Let's why don't why don't we leave it let's let's about this for a little bit. But the second piece of the amendment is regulating urgent cash advances. It's not a ban. It's regulation. So they can still operate in Vermont if they opened the DFR and become licensed? What's anybody think about that?

[Herb Olson (Member)]: I think it makes sense. It really is. It's a regulation like kind of thing. Mostly has to do with disclosure to make sure that the kinds of transactions that would come within the scope, the individual, and it's a smaller company. It's counterproductive licensing, mean, personal buying. And so, the landscape, that kept bringing up, that's almost individual. That's an almost individual loan, but it's commercial. But it's very small, and it just seems to make sense to extend what we do with licensed lenders to this

[Monique Priestley (Clerk)]: area that seems to be getting a little more

[Herb Olson (Member)]: prevalent. And without the disclosures, without some recourse to a regulatory entity that licenses the company, people could get hurt. And Again, it's regulation light. There's not a whole lot going on there, but at least it's a framework that someone who gets burned on something can go to someone to hear what recourse they

[Anthony "Tony" Micklus (Member)]: I'm sports, Bill. I'm sorry. I support the event. Part of the event. Part that part of the event. Yes. Just I can be sure of. I kind of question the need, but like I said, mean, you want well, you want us I don't think anyone can sell whatever product they want, which is an hurting company. And a little bit of regulation, I think it's good. I think it'll prevent

[Michael Marcotte (Chair)]: maybe some of the more

[Anthony "Tony" Micklus (Member)]: nefarious companies that do this, like the five that called me today. So I'm, yeah, I'm I'm 100% supportive of that.

[Abbey Duke (Member)]: I I mean, it's a part

[Michael Marcotte (Chair)]: of me. Yeah. Okay. Please. I'm in support of the merchant cash advance language. Region. Zero two for that.

[Anthony "Tony" Micklus (Member)]: So

[Michael Marcotte (Chair)]: let's take ten minutes break. I'm back at 03:15, and then decision. Are you gonna do with?