Massachusetts AG Alleges that Payment Processor Should Have Known Cryptocurrency Offer Was a Scam

  • Massachusetts AG Maura Healey reached a settlement with payment processor Stripe, Inc. to resolve allegations that its fraud prevention practices violated Massachusetts’s Consumer Protection Law.
  • In the assurance of discontinuance, the AG’s office alleges that Stripe processed payments for an allegedly fraudulent and unregistered offer and sale of cryptocurrency, and that Stripe knew or should have known that the offer and sale was fraudulent, but failed to prevent harm to consumers because its risk monitoring and fraud prevention and mitigation procedures were inadequate.
  • Under the terms of the assurance of discontinuance, among other things, Stripe agreed to pay $120,000 to the AG’s office. Stripe also improved its risk monitoring and fraud prevention and mitigation procedures, including by enhancing duplicate screening procedures for accounts with shared bank accounts, improving the protocols for review and monitoring of merchants’ websites, and revising its procedures regarding the handling of law enforcement requests and consumer complaints.