It means merchants will be liable for counterfeit card fraud if the transaction mechanism used isn't EMV aka chip and pin, i.e. magnetic swipe cards are done.

Coin is betting the EMV deadline will be pushed out indefinitely or is using this gadget as a trojan horse for something bigger.

For more information on the liability shift: http://www.tsys.com/acquiring/engage/white-papers/United-Sta... The gist: October 1, 2015 – Liability will shift to acquirers for domestic and cross-border counterfeit fraud card-present POS transactions if the merchant does not have an EMV-enabled POS device

It means that as of 2015, merchants in the US who accept magstripe (as opposed to chip and pin) are responsible for any fraud that occurs when the payment was made with magstripe.

Even if US retailers were accepting magstripe and taking on the risk, I doubt they would accept a sketchy-looking unlabelled card.