13-09.1-52. Prevention of fraudulent activity

13-09.1-52. Prevention of fraudulent activity 1. A virtual-currency kiosk operator shall use blockchain analytics software to assist in the detection and prevention of suspicious activity, including sending purchased virtual currency from a virtual-currency kiosk operator to a virtual-currency wallet known to be affiliated with fraudulent activity at the time of a transaction and identifying patterns that reflect money laundering or other illicit activity. The commissioner may request evidence from any virtual-currency kiosk operator of use of blockchain analytics. 2. A virtual-currency kiosk operator shall take reasonable steps to detect and prevent fraud, including establishing and maintaining a written antifraud policy. The antifraud policy must include: a. The identification and assessment of fraud-related risk areas; b. Procedures and controls to protect against identified risks; c. Allocation of responsibility for monitoring risks; and d. Procedures for the periodic evaluation and revision of the antifraud procedures, controls, and monitoring mechanisms. 3. Each virtual-currency kiosk operator shall designate and employ a compliance officer with the following requirements: a. The individual must be qualified to coordinate and monitor compliance with this chapter and all other applicable federal and state laws and rules; b. The individual must be employed full-time by the virtual-currency kiosk operator; and c. The designated compliance officer may not be an individual who owns more than twenty percent of the virtual-currency kiosk operator by whom the individual is employed. 4. Compliance responsibilities required under federal and state laws and rules must be completed by full-time employees of the virtual-currency kiosk operator. 5. A virtual-currency kiosk operator shall maintain, implement, and enforce a written enhanced due diligence policy. The policy must be reviewed and approved by the virtual-currency kiosk operator's board of directors or equivalent governing body. 6. A virtual-currency kiosk operator shall designate and employ a consumer protection officer. The consumer protection officer: a. Must be qualified to coordinate and monitor compliance with state and federal law; b. Must be employed full-time by the virtual-currency kiosk operator; and c. May not own more than twenty percent of the virtual-currency kiosk operator.