Nebraska has enacted a new law aimed at enhancing oversight of cryptocurrency ATMs to combat fraud.
As stated in a press release from Nebraska Governor Jim Pillen on March 12, the law, known as the Controllable Electronic Record Fraud Prevention Act, establishes stricter licensing and reporting protocols for operators of crypto ATMs.
This legislation was proposed as part of Legislative Bill 609, introduced by Senator Eliot Bostar on January 22.
Operators of crypto ATMs are now required to obtain a license under Nebraska’s Money Transmitters Act and secure approval from the state’s Department of Banking and Finance before installing their machines.
Additionally, the law introduces daily transaction limits: new users are restricted to sending a maximum of $2,000 per day, while established customers have a limit of $5,000. Transaction fees are capped at 18%.
To combat fraudulent activities, the bill mandates that ATM operators prominently display warnings about prevalent scams and hire a compliance officer to implement anti-fraud strategies.
New users who report fraud within 90 days will be eligible for full refunds, including any fees, while existing users can recover fees incurred from fraudulent transactions.
Pillen remarked that this initiative is part of a broader strategy to bolster the cryptocurrency sector while putting in place “guardrails to prevent criminals from exploiting Nebraskans.”
State officials have emphasized that maintaining transparency and consumer protection is a primary concern.
Kelly Lammers, Director of the Nebraska Department of Banking, noted that the state is “open for business in the cryptocurrency arena,” but it is imperative to ensure a secure and equitable environment.
He further stated that those using crypto ATMs to take advantage of Nebraska residents will face intensified scrutiny.
To implement these new regulations, Nebraska is establishing a specialized team to closely monitor crypto ATM operations. Lammers indicated that this team will focus on identifying fraudulent transactions and ensuring adherence to the new guidelines.
Similar issues have led several states, including Illinois, North Dakota, and Arizona, to adopt restrictions as the number of crypto ATM-related fraud incidents continues to grow.
Recently, Illinois Senator Dick Durbin introduced The Crypto ATM Fraud Prevention Act, which seeks to impose transaction limits and enhance consumer protections.
On February 8, Arizona Representative David Marshall proposed House Bill 2387, which includes comparable restrictions and licensing requirements for kiosk operators.