Lawmakers in North Dakota are currently discussing a new piece of legislation designed to impose stricter regulations on cryptocurrency ATMs in an effort to safeguard residents from potential scams. House Bill 1447, introduced on January 15, proposes several measures including capping daily customer withdrawals to $1,000, limiting transaction fees to either $5 or 3% of the transaction amount (whichever is higher), and mandating that the machines display warnings about fraud risks.
The urgency for such regulations is underscored by recent statistics revealing that North Dakotans reported 103 complaints related to cryptocurrency scams to the FBI in 2023, leading to losses of approximately $6.5 million. This is part of a larger troubling trend in the United States; the FBI has noted an alarming total of $5.6 billion in losses attributed to cryptocurrency fraud cases for the year, with 5,500 incidents directly involving crypto ATMs that resulted in losses exceeding $189 million.
House Representative Steve Swiontek, who sponsors the bill, emphasized the lack of protective measures in place for crypto ATMs compared to traditional banking machines, which makes them a target for criminals. This gap has allowed scammers to exploit unsuspecting users with relative ease.
In addition, the bill aims to enhance consumer rights by advising users to report suspicious activities to law enforcement and informing them that funds lost due to errors or fraudulent schemes are often irrecoverable. Josh Askvig, representing older citizens, highlighted the bill’s importance in protecting vulnerable populations, particularly seniors from losing their savings.
While crypto ATM operators recognize the necessity for consumer protections, some, like Kevin Lolli from CoinFlip, express concerns over the proposed limits on fees and transactions, arguing that current fees, which range between 8% and 20%, account for the operational costs of these machines. As of now, there are over 37,000 crypto ATMs worldwide, with a significant portion located in the United States, indicating the growing presence of this digital currency landscape.
