A bill in North Dakota that establishes several protections for cryptocurrency ATMs, including a daily transaction limit and required fraud warnings, has successfully passed through the Senate.
On March 18, House Bill 1447 was approved by the Senate with a 45-to-1 vote, moving it closer to becoming law. The legislation, introduced in January, aims to combat scams and enhance regulation of crypto ATM operators.
If enacted, the bill would obligate ATM operators to obtain licenses as money transmitters and enforce a $2,000 cap on daily transactions across their devices. It also requires fraud warning notices to be displayed at the kiosks and stipulates quarterly reports detailing ATM locations, transaction statistics, and operator information.
Initially, the bill suggested a $1,000 daily limit, but this was later revised to $2,000 for the first five transactions within a 30-day period. The Senate has now streamlined the limit to a straightforward $2,000 cap per day.
Moreover, operators will be required to utilize blockchain analytics to detect suspicious activity and notify authorities of any potential fraud.
The bill will return to the House for approval of the amendments before reaching Governor Kelly Armstrong for final consideration.
As instances of crypto ATM fraud rise, this legislation seeks to implement essential protections for residents against financial harm.
During a hearing on January 22, Lisa Kruse, North Dakota’s financial institutions commissioner, revealed that residents had reported 103 crypto scam complaints to the FBI in 2023, leading to losses totaling $6.5 million.
House Representative Steve Swiontek, who sponsored the bill, pointed out that the absence of regulation had made crypto ATMs particularly vulnerable to scammers.
Across the United States, crypto ATMs are widely accessible, with almost 30,000 machines currently in operation. However, the rise in fraud cases has prompted regulators to propose new laws targeting misuse.
Just last week, Nebraska Governor Jim Pillen enacted a similar piece of legislation, tightening regulations for crypto ATM operators. The Controllable Electronic Record Fraud Prevention Act, part of Legislative Bill 609, introduces new licensing and reporting requirements to help mitigate fraud.