Connecticut closes door on Bitcoin, mandates strict disclosure for crypto firms

Connecticut leads with strict crypto disclosure laws, aiming to curb financial scams and protect unknowing investors.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Connecticut has taken a firm stance against government involvement in digital assets like Bitcoin.

On June 30, Governor Ned Lamont signed a new bill into law that bans state agencies from investing in crypto, including Bitcoin.

The legislation, known as House Bill 7082, also prevents state entities from accepting these assets as payment for any financial obligation owed to the state.

Meanwhile, the bill not only shuts the door on future crypto reserves, but it also outlines strict rules for crypto-related businesses operating within the state.

Under the new regulations, companies involved in virtual currency transmission must clearly disclose all material risks associated with their services. This includes stating that:

“Virtual currency transactions are irreversible and are used by persons seeking to defraud customers, including, but not limited to, a person impersonating a customer’s loved one, threatening jail time,
stating that a customer’s identity has been stolen, insisting that a customer withdraw money from the customer’s bank account and purchase cryptocurrency or alleging a customer’s personal computer
has been hacked.”

According to lawmakers, this move is meant to protect consumers from the volatility and complexity often associated with digital assets.

This represents one of the most sweeping bans on digital asset adoption by any US state government to date. Notably, the law had passed unanimously through the Connecticut General Assembly earlier in June.

Other US states embrace Bitcoin reserves

While Connecticut enacts restrictions, other states are heading in the opposite direction.

Texas governor recently signed Senate Bill 21 into law, allowing the state to create and fund a Bitcoin reserve using public money.

This puts Texas alongside Arizona and New Hampshire, which have also introduced similar measures to add digital assets to their state treasuries.

The contrasting approaches between these states highlight a growing divide in how they view the role of digital assets in public finance. Some see Bitcoin as a hedge and diversification tool, while others view it as too unstable for taxpayer-backed investments.

Nevertheless, the push for state-managed crypto reserves is gaining momentum across the US. According to Bitcoin Laws data, 48 bills related to Bitcoin reserves are currently under consideration in various states, with eight states already approving the initiative.