After 103 residents of North Dakota reported $6.5 million in losses to crypto schemes in 2023, legislators in the state have sponsored a bill to combat crypto ATM transactions.
A recently introduced bill in North Dakota has been the subject of debate among legislators. The bill aims to restrict the use of crypto ATMs and implement a series of new regulations on the machines to safeguard residents from fraud.
House Bill 1447, which was introduced to the state’s legislative assembly on Jan. 15, would restrict the number of crypto ATM withdrawals per day to $1,000, cap fees at $5 per transaction or 3% of the total amount, whichever is greater, and mandate that the machines issue fraud warning notices.
On January 22, Lisa Kruse, the commissioner of the Department of Financial Institutions in North Dakota, informed the House Industry, Business, and Labour Committee that the state’s residents submitted 103 complaints to the FBI regarding crypto scams, resulting in a collective loss of $6.5 million in 2023.
In September, the FBI reported that Americans lost $5.6 billion as a result of crypto fraud in 2023. Additionally, the agency documented 5,500 cases that involved a crypto ATM, resulting in losses exceeding $189 million.
Currently, crypto ATMs lack the protection measures that conventional money ATMs have, which makes it simpler for perpetrators to defraud victims, according to House Representative Steve Swiontek, the primary sponsor of the bill.
Swiontek, who was previously the president and CEO of Gate City Bank, stated at the hearing, “Unfortunately, this has enabled perpetrators to exploit them for larceny.”
Josh Askvig, the state director of the American Association of Retired Persons, stated that the measure would establish critical consumer protections to prevent an increased number of elderly residents from having their hard-earned savings taken.
The bill would mandate that crypto ATMs display a warning and advise users to contact law enforcement if they suspect they are being duped. Additionally, the machines would be required to acknowledge that funds lost due to error or fraud may not be recoverable.
Kevin Lolli, the associate general counsel of CoinFlip, a crypto ATM operator, stated during the hearing that the company supported the consumer protection aspect of the measure but opposed the fee and transaction limits.
Lolli informed legislators that crypto ATMs typically impose a fee between 8% and 20% to cover the costs of hardware and maintenance, armoured vehicle services, and rent payments to local businesses that host the devices.
Some crypto ATMs have already reported suspicious transactions of over $2,000 and transactions of over $10,000 to US authorities.
Coin ATM Radar data indicates that there are 37,155 crypto ATMs currently operational in 65 countries, with nearly 30,000 of them located in the United States.
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