The North Dakota Senate has passed a bill limiting the operations of Bitcoin ATMs in the state to $2000 daily withdrawals by a single individual. House Bill 1447 was unanimously passed in the Senate on March 18 and is expected to move to the House and then to Governor Kelly Armstrong for signing.
The proposed bill stipulates that any firm that wishes to set up a crypto ATM and kiosk will be required to hold a money transmitter license in the state. It also obligates them to provide fraud warnings, use blockchain analysis to identify prohibited actions, and file quarterly reports with information on existing kiosks, operators’ names, and transaction data.
The bill initially reduced each user’s per-day operation limit from $2,500 to $1,000, as Cryptopolitan reported. However, a House Committee changed it last month by capping the first five transactions within 30 days at $2,000 per day. The Senate has removed this concept of tiers and instead implemented a strict policy of a $2000 ceiling for everything.
Other states face issues with crypt ATMs
The legislation comes in the wake of fraudulent activities involving crypto ATMs. The primary author of the bill, House Representative Steve Swiontek, pointed out that there are no protections for consumers in such machines and criminals use it for conning people.
North Dakota is not the only state grappling with these issues. Nebraska Governor Jim Pillen signed an identical bill known as the Controllable Electronic Record Fraud Prevention Act on March 13. Governor Pillen stated, “An important part of these efforts is to make sure that we have guardrails to prevent criminals from taking advantage of Nebraskans.”
Meanwhile, in Stillwater, Minnesota, officials are planning an outright ban of cryptographic currency ATMs mostly due to fraud. Statistics from the city reveal that it has lost $213,000 to crypto scams. Mayor Ted Kozłowski and Police Chief Brian Mueller have questioned the efficacy of current fraud advisories on these machines.
“Make it far too easy to prey on people and it’s impossible to trace if we need to recover funds.”
Mayor Kozlowski
At the federal level, US Senator Dick Durbin proposed a federal bill concerning crypto ATM scams. Durbin cited an example where a scammer lured a victim into depositing $15,000 in a crypto ATM on grounds of escaping legal repercussions.
The high incidence of fraud related to these machines has led to heightened regulation. In its report issued in September 2023, the FTC said that fraud involving Bitcoin ATMs increased nearly tenfold between 2020 and 2023, amounting to $65 million in the first half of 2024. The study further showed that first-time consumers and those who are over sixty years of age are three times more vulnerable to falling prey to such cons.
Despite these risks, the United States remains the leading country in the cryptocurrency ATM market. Currently, there are 29,822 Bitcoin ATMs located in the U.S., which take up 78% of all the ATMs globally. Canada has the second largest number of ATMs at 3,486, which is 9.2% of the global figure, whereas Australia has 1,613 ATMs, thus constituting 4.3%.
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