The hearing on HB 2515 was opened by Chairperson Dietrich. Revisor Eileen Ma provided a review of the bill. (Attachment 1)

Nathaniel Castillo of the Attorney General's Office spoke in support of the bill. (Attachment 2) He explained that crypto fraud involving kiosks is now a top ten consumer complaint in Kansas.These virtual currency kiosks, in Kansas, currently operate outside traditional money transmission regulatory frameworks and are not subject to consumer protection requirements. Kiosk operators may voluntarily refund in matters of fraud but it is often not the case. According to FBI data, the rise of fraud involving these kiosks is accelerating nationwide. In 2023 there were 5,500 complaints and losses exceeding $189 million compared to last year, there were 12,000 complaints and over $333.5 million reported in losses.

Brock Roehler of the Office of the State Bank Commissioner testified as a proponent of the bill. (Attachment 3) He stated that the bill acts as a happy medium between protecting consumers and allowing legitimate businesses to operate.

Kristen Zluticky of the Sedgwick County District Attorney via WebEx voiced support for the bill. (Attachment 4) She shared that even though blockchain can be used to trace the money, it can eventually and easily moved through multiple non-custodial crypto wallets and even swapped to a different cryptocurrency and moved to a different blockchain. There is no way to find the perpetrator or recover the loss.

Megan Lynn of AARP Kansas spoke in favor of the bill. (Attachment 5) She urged the Committee members to support the bill which will create important consumer protections for Kansans. There is a disproportionate number of older Kansans who are having their life savings stolen by criminals.

Kelly VanZwoll of the Kansas Bankers Association stood as a proponent of the bill. (Attachment 6) She related to the Committee how scammers coach their victims to lie to bank tellers when withdrawing large sums of money. Placing a $2,000 transaction limit is vital to slow down the process and the scammers manufactured sense of urgency. The Attorney General of Washington D.C. alleged that 90% of deposits in a particular operator's machines were a result of fraud. 

Jon Turke of Coinflip via WebEx testified in favor of the bill. (Attachment 7) He stated that his company worked with the Office of the State Bank Commissioner in crafting this legislation and asked that the Committee consider their suggestions for changes in the bill as indicated in his written testimony.

Cale Beam for the Kansas Credit Union Association spoke in support of the bill. (Attachment 8) He reiterated that the safeguards put in the bill will help protect Kansas consumers. 

Eric Baker of Satoshi Action Fund via WebEx was a proponent of the bill. (Attachment 9) He supported the bill for several reasons noting its robust fraud warning, new customer transaction limits, and a 72 hour no-questions refund policy. He also stated that a third-party study from TRM Labs said that 98.8% of the volume of cash to crypto transactions are legitimate. 

Conferees stood for questions from the Committee members.

Proponent, written-only testimony was received from:

Ed Klumpp, Legislative Liasion, Kansas Association of Chiefs of Police, Kansas Sheriffs Association, and Kansas Peace Officers Association (Attachment 10) and

Whitney Darcy, Senior Vice President of BSA & Fraud Operations Manager, Oklahoma Fidelity Bank. (Attachment 11)

Neutral, written-only testimony was received from Mike Geiselhart, Government Relations Manager, Bitcoin Depot. (Attachment 12)

The hearing on HB 2515 was closed by Chairperson Dietrich.

Meeting adjourned at 10:26 a.m. Next meeting is scheduled for March 2, 2026.