The governor of Nebraska, Jim Pillen, has enacted new legislation aimed at combating cryptocurrency fraud as incidents involving crypto ATMs surge across the United States.
“Cryptocurrency is a significant, developing sector, and we are diligently working to establish Nebraska as a leader in this field,” stated Governor Pillen on March 12 after the bill’s signing.
“An essential aspect of these initiatives is ensuring that we have safeguards in place to protect Nebraskans from exploitation by criminals,” he continued.
The bipartisan legislation establishes the “Controllable Electronic Record Fraud Prevention Act,” designed to fight fraud and safeguard users of crypto kiosks and ATMs.
Recent findings from the Federal Trade Commission reveal that victims have suffered losses exceeding $65 million due to crypto ATM fraud in the first half of 2024. “Fraud losses at Bitcoin ATMs are soaring, having increased nearly tenfold from 2020 to 2023,” the commission noted in September.
The bill, which was introduced on January 22 by Senator Eliot Bostar, mandates that operators of crypto ATMs and kiosks be licensed under Nebraska’s Money Transmitters Act and registered with the Department of Banking and Finance. They are also required to submit quarterly updates on kiosk locations, business names, and transaction data.
Additionally, the legislation enforces transaction caps of $2,000 per day for new users and $5,000 per day for established customers, with limits on fees to 18% of the transaction value.
New customers reporting fraud within 90 days can obtain a full refund, including any fees, while existing customers may receive refunds on fees related to fraudulent transactions.
Kiosk operators are required to display fraud warnings and appoint a compliance officer to ensure adherence to fraud prevention protocols.
Earlier this month, the US crypto ATM network saw a reduction of over 1,200 machines following the introduction of similar legislation by Illinois Senator Dick Durbin.
“Nebraska is open for business in the cryptocurrency sector,” commented Kelly Lammers, director of the state Department of Banking, adding that, “those who target our citizens using crypto ATMs as part of their scams will soon face a more vigilant oversight team.”
While Nebraska remains supportive of cryptocurrency, it has not yet joined the 21 states that have proposed legislation to create strategic crypto reserves.