The state of North Dakota is on the verge of establishing a licensing system for cryptocurrency ATMs following the passage of a bill by its Senate that lays out a regulatory framework for the sector.
Introduced on January 15, House Bill 1447 seeks to safeguard consumers against scams associated with crypto ATMs by requiring operators to provide on-screen fraud alerts to users, secure money transmitter licenses, utilize blockchain analytics tools to identify and prevent fraud, and submit quarterly reports detailing kiosk locations and transaction data.
Furthermore, each operator is required to designate a compliance officer.
According to a report by TRM Labs, crypto ATMs have been linked to at least $160 million in illegal transactions since 2019, with global law enforcement agencies considering them a significant risk for money laundering and fraudulent activities.
Data from the FTC indicates that losses from bitcoin ATM scams have surged nearly tenfold since 2020.
In the UK, the Financial Conduct Authority has intensified oversight of the sector, conducting crackdowns on unlicensed operators.
In 2024, the FCA prosecuted Olumide Osunkoya for operating illegal crypto ATMs that handled $3.4 million, marking the first such case in the country. Osunkoya was recently sentenced to four years in prison due to his involvement in the illegal network and was also convicted for forgery, using false IDs, and possession of criminal property.
Despite the growth in Bitcoin prices during 2024, the number of crypto ATMs has not increased, reflecting mounting fraud and regulatory pressures. Market data from CoinATMRadar suggests that the count of crypto ATMs in the U.S. has remained relatively stable since 2022.