State Senate Tightens Crypto ATM Regulations to Combat Fraud
The North Dakota Senate has passed a bill introducing new regulations for cryptocurrency ATMs, including a daily transaction cap of $2,000 per user. The measure, part of House Bill 1447, was approved in a 45-to-1 vote on March 18.
Originally introduced to the North Dakota Legislative Assembly on January 15, the bill aims to protect residents from scams by implementing stricter rules for crypto ATM operators. The legislation also reintroduces a transaction limit that had been previously loosened by the North Dakota House of Representatives.
Key Provisions of House Bill 1447
The Senate’s revised version of the bill requires crypto ATM and kiosk operators to be licensed as money transmitters and enforces the following new rules:
- $2,000 daily transaction limit for users across all ATMs operated by a single provider.
- Fraud prevention measures, including warnings at ATMs.
- Blockchain analytics monitoring to detect and report suspicious activities.
- Quarterly reporting requirements for kiosk locations, operator names, and transaction data.
Initially, the bill limited daily transactions to $1,000, but a House committee later increased the limit to $2,000 per day for the first five transactions within a 30-day period. However, the Senate has now imposed a firm $2,000 cap, removing the tiered limit system.
The bill must now return to the House for approval before heading to Governor Kelly Armstrong, who will decide whether to sign it into law or veto the measure.
Lawmakers Push for Stronger Crypto ATM Oversight
During a North Dakota House Industry, Business, and Labor Committee hearing on January 22, Representative Steve Swiontek, the bill’s primary sponsor, stressed that crypto ATMs currently lack sufficient security measures, making them vulnerable to fraud and exploitation by criminals.
North Dakota is not alone in taking action. Nebraska Governor Jim Pillen signed similar legislation on March 13, known as the Controllable Electronic Record Fraud Prevention Act, aimed at preventing fraud and strengthening consumer protections.
At the federal level, U.S. Senator Dick Durbin of Illinois proposed national legislation on February 25 targeting crypto ATM fraud. Durbin cited a case where a scammer convinced a victim to deposit $15,000 into a crypto ATM under the false pretense of avoiding arrest.
Next Steps and Potential Impact
If signed into law, North Dakota’s crypto ATM regulations would establish one of the strictest frameworks for ATM-based cryptocurrency transactions in the U.S. The move is expected to enhance consumer protections, prevent financial scams, and improve oversight of digital asset transactions within the state.
With more states considering similar regulations, the debate over how to balance crypto adoption with fraud prevention is likely to continue at both the state and federal levels.
