North Dakota lawmakers want stronger rules for bitcoin ATMs to prevent financial scams. The new legislation, House Bill 1447, seeks to decrease the dangers involved with crypto ATM transactions in response to considerable losses recorded by state residents as the result of frauds.
The measure proposes limiting daily withdrawals from cryptocurrency ATMs to $1,000 and capping transaction costs at $5 or 3% of the entire amount, whichever is higher. Furthermore, all computers would have to show fraud warnings to alert users to potential risks.According to Lisa Kruse, commissioner of the North Dakota Department of Financial Institutions, residents reported 103 cryptocurrency scams in 2023, resulting in a total loss of $6.5 million. This emphasizes the critical need for consumer protection in the cryptocurrency business.
The bill’s major proponent, House Representative Steve Swiontek, noted that traditional ATMs have safeguards that crypto ATMs do not. This lack of safeguards has made it simpler for scammers to defraud naive customers. Advocacy groups, like the American Association of Retired Persons (AARP), support the initiative because it has the ability to safeguard vulnerable groups, such as seniors.
However, not everyone supports the planned actions. Crypto ATM companies, including CoinFlip, argue that the bill’s fee and transaction limits will hurt their company. Kevin Lolli, CoinFlip’s assistant general counsel, indicated that fees ranging from 8% to 20% cover ATM-related expenses such as hardware, maintenance, and rent. Reducing fees to the recommended levels may make operating these devices unprofitable in the state.
Despite the criticism, policymakers continue to focus on establishing consumer protection measures while addressing the issues that crypto ATM operators confront. The conclusion of this legislation may establish a precedent for other jurisdictions seeking to regulate cryptocurrency transactions and protect residents from fraud.
