February 6, 2025

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North Dakota Suggests Stricter Regulations for Crypto ATMs

North Dakota Proposes Tougher Crypto ATM Regulations

Lawmakers in North Dakota have introduced a new bill that seeks to impose stricter regulations on crypto ATMs operating within the state. House Bill 1447, which was introduced in January 2025, seeks to address concerns over the growing number of scams tied to these machines, particularly those targeting vulnerable individuals.

The proposed bill would impose several new limitations on crypto ATMs, including a daily withdrawal cap of $1,000 per customer, fee restrictions, and mandatory fraud warnings displayed on all machines. These measures aim to reduce the risk of fraud and prevent scammers from exploiting users at crypto ATMs, which are often used for anonymous transactions.

Lawmakers Push for Stricter Measures Amid Rising Crypto Fraud Cases

The push for stricter regulations comes in response to alarming statistics surrounding crypto-related scams in North Dakota. During a hearing held on January 22, Lisa Kruse, commissioner of the North Dakota Department of Financial Institutions, revealed that the state had received 103 complaints regarding crypto scams in 2023 alone, with total losses amounting to $6.5 million. Nationwide, the FBI reported that Americans lost a staggering $5.6 billion to crypto fraud in 2023, with crypto ATMs being involved in over 5,500 cases, leading to losses of more than $189 million.

House Representative Steve Swiontek, the primary sponsor of House Bill 1447, highlighted the lack of consumer protection features on crypto ATMs compared to traditional ATMs, which are typically equipped with safeguards to protect users. He expressed concern that without proper regulations, crypto ATMs are becoming a target for criminals who use them to exploit unsuspecting individuals.

“Unfortunately, this has allowed criminals to exploit them for theft,” Swiontek stated during the committee hearing, underscoring the need for more protective measures for residents.

Advocacy groups such as AARP have also thrown their support behind the bill, citing its potential to protect senior citizens who are frequently targeted by crypto scams. Josh Askvig, the state director for AARP, praised the bill’s focus on consumer protection and called it a step forward in securing vulnerable populations from fraud.

Crypto ATM Operators Warn of Potential Negative Impact

While the bill has received broad support for its consumer-centric approach, it has drawn criticism from crypto ATM operators who argue that the proposed restrictions could harm the industry. Kevin Lolli, the assistant general counsel for CoinFlip, a popular crypto ATM operator, warned that limiting fees and transaction amounts could create significant challenges for operators.

Lolli explained that typical crypto ATM fees range from 8% to 20%, which help cover the costs of hardware, maintenance, armored car services, and the rent for the locations where the machines are placed. With these new fee restrictions proposed by the bill, operators may find it difficult to sustain the costs of running crypto ATMs in North Dakota.

“Restricting fees and transactions to these levels could keep operators from operating machines in North Dakota,” Lolli said, highlighting concerns that the restrictions may force some operators to shut down or reduce their services in the state.

Despite these concerns, Lolli also acknowledged that many crypto ATM operators already comply with anti-fraud measures, including reporting suspicious transactions exceeding $2,000 or $10,000 to federal authorities. He emphasized that operators are not neglecting fraud prevention, and some already implement safeguards to protect users from fraudulent activity.

What’s Next for House Bill 1447?

As North Dakota lawmakers continue to review House Bill 1447, the balance between protecting consumers and ensuring the viability of the crypto ATM industry will be a key point of discussion. The proposed bill reflects a growing trend across the globe of tightening regulations on the cryptocurrency sector, particularly with regard to scams and fraudulent activities linked to crypto transactions.

The bill’s next steps will likely involve further debate and potential amendments before it is put to a vote. If passed, the regulations could set a precedent for other states to follow in addressing the risks posed by crypto ATMs and creating a more secure environment for digital asset transactions.

Conclusion

North Dakota’s proposed legislation seeks to address the rising issue of crypto scams by implementing new rules for crypto ATMs, including daily withdrawal limits, transaction fee caps, and mandatory fraud warnings. While the bill has garnered support from consumer protection groups and lawmakers, some in the industry warn that the restrictions could negatively affect crypto ATM operators. As the debate continues, the state’s decision could have significant implications for both the local crypto market and the broader national conversation on cryptocurrency regulation.

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