TLDR

North Dakota Senate passed House Bill 1447 to regulate crypto ATMs with a $2,000 daily transaction limit
The bill requires operators to obtain money transmitter licenses and use blockchain analytics for fraud detection
Operators must display fraud warnings, submit quarterly reports, and appoint compliance officers
This legislation follows FTC data showing Bitcoin ATM scam losses increased nearly tenfold since 2020
Similar legislation has been approved in Nebraska, with federal proposals also under consideration

North Dakota is about to create a new licensing system for cryptocurrency ATMs. The state Senate passed House Bill 1447 on March 18 with a strong vote of 45 to 1. The bill aims to protect people from scams by setting up rules for crypto ATM operators.

The bill was first introduced on January 15, 2025. It focuses on making crypto ATMs safer for users. House Representative Steve Swiontek, who introduced the bill, said crypto ATMs currently lack protection measures.

Under the new rules, crypto ATM operators must get money transmitter licenses. This ensures they follow proper financial regulations. The licensing requirement is a key part of the state’s effort to bring oversight to this growing industry.

The bill limits daily transactions to $2,000 per user. This amount changed during the lawmaking process. The original bill proposed a $1,000 limit, but the House committee loosened these limits last month.

After the Senate’s changes, the bill must return to the House for another vote. If approved, it will go to North Dakota Governor Kelly Armstrong to either sign into law or veto. The outcome will determine how crypto ATMs operate in the state.

Fraud Warnings on Screen

Crypto ATM operators will need to display fraud warnings on their screens. These warnings aim to alert users about possible scams before they complete transactions. Many scam victims have reported being directed to crypto ATMs to send money to criminals.

The bill also requires operators to use blockchain analytics software. This technology helps detect and fight fraud by tracking suspicious transactions. Operators must report any questionable activity to authorities.

Quarterly reports on kiosk locations and transactions will be mandatory. These reports will give regulators better visibility into how crypto ATMs are being used across the state. This information could help identify patterns of fraud.

Compliance Officers

Each operator must appoint a compliance officer. This person will be responsible for making sure the company follows all the new regulations. Having a dedicated compliance officer adds another layer of consumer protection.

The legislation comes amid rising concerns about crypto ATM scams nationwide. A report by TRM Labs found that crypto ATMs have facilitated at least $160 million in illegal transactions since 2019. Law enforcement agencies view these machines as high-risk for money laundering.

Federal Trade Commission data shows Bitcoin ATM scam losses have grown nearly tenfold since 2020. In the first half of 2024 alone, these losses topped $65 million. Older adults are three times more likely to fall victim to these scams.

North Dakota’s action follows similar moves in other states. Nebraska Governor Jim Pillen signed comparable legislation on March 13, called the Controllable Electronic Record Fraud Prevention Act. These state efforts show increasing awareness of the problem.

At the federal level, Senator Dick Durbin of Illinois has proposed similar legislation. He was moved to act after hearing from a constituent who lost $15,000 through a crypto ATM scam. The scammer had claimed there was an arrest warrant that could be cleared by paying a fine via crypto.

Crypto ATM Use

Despite Bitcoin’s price growth in 2024, the number of crypto ATMs in the US has remained flat since 2022. The United States has 29,822 machines, representing 78% of the global market. Canada ranks second with 3,486 machines (9.2%), while Australia is third with 1,613 (4.3%).

In the United Kingdom, authorities have increased scrutiny on unregistered crypto ATM operators. The Financial Conduct Authority recently prosecuted Olumide Osunkoya for running illegal crypto ATMs that processed $3.4 million. Osunkoya received a four-year sentence for this and related crimes.

The post Cash Limits & Warning Screens: North Dakota’s Plan to Stop Crypto ATM Fraud appeared first on CoinCentral.

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Filed under: News - @ March 19, 2025 9:50 am