North Dakota Gives Nod to Crypto ATM Fraud Protection Bill

• North Dakota’s HB 1447 sets a 2,000 cap on crypto ATM transactions to prevent fraud.
• Crypto ATM operators must be licensed, display fraud alerts, and track transactions. 
• The U. S. leads with over 29,800 machines, holding 78% of the global market share. 

The North Dakota Senate passed a new law concerning crypto ATMs on Wednesday with a vote of 45-1. House Bill 1447 seeks to protect residents from fraud related to cryptocurrency ATMs used for financially services. The bill will return to the House for a concurrence vote to complete the legislative process before getting signed by Governor Kelly Armstrong.

The legislation that was proposed at the start of this year will define new rules for crypto ATM services. Further, the bill requires operators to obtain the necessary licenses to act as money transmitters in the state. They also have to display fraud alerts and track transactions with the help of blockchain data. Also, the operators must report the number of kiosks at various locations and submit the sales statistics on a quarterly basis.

Transaction Limit Cap

One of the key provisions in the bill is the $2,000 cap on daily transactions. This limit applies to the first five transactions within a 30-day period. Initially, the bill set a lower cap of $1,000 per day, but a House committee increased the limit to $2,000. The Senate upheld the revision, making it a central part of the legislation.

Crypto ATMs have been a growing concern in North Dakota due to rising scams. House Representative Steve Swiontek, said these machines have been exploited for theft, emphasizing the need for regulations to safeguard residents from criminal activities targeting crypto ATM users.

Related: Bank of Korea Launches CBDC Pilot for Digital Payments

North Dakota’s bill follows similar actions in Nebraska. On March 13, Nebraska Governor Jim Pillen signed the Controllable Electronic Record Fraud Prevention Act into law, addressing fraud associated with the crypto ATMs. At the federal level, Senator Dick Durbin of Illinois proposed a similar bill in February to address scams involving crypto ATMs.

Alarming Fraud Trends

The rise of crypto ATM scams has been alarming. According to the Federal Trade Commission, consumers lost $10 billion to fraud at Bitcoin ATMs between 2020 and 2023. In the first half of 2024, losses exceeded $65 million, and the victims were elderly members. Notably, senior members above 60 years are likely to be scammed. 

As of now, the United States has the most number of Bitcoin ATMs around the world, with over 29,800 crypto ATMs, accounting for about 78% of the global market. Following this, Canada and Australia take up 9.2% and 4.3%, of the market share respectively.

The post North Dakota Gives Nod to Crypto ATM Fraud Protection Bill appeared first on Cryptotale.