Key Takeaways
- Swiontek, the bill’s sponsor, emphasized that the lack of consumer safeguards on crypto ATMs has made them vulnerable to exploitation.
- The proposed bill would require crypto ATMs to display warnings about potential scams,
North Dakota has put forth a new legislative proposal tackling crypto atm scams aimed at improving consumer protection. The House bill 1447, introduced by House Representative Steve Swiontek, seeks to impose stricter safeguards on crypto ATMs.
Swiontek, the bill’s sponsor, emphasized that the lack of consumer safeguards on crypto ATMs has made them vulnerable to exploitation. “Unfortunately, this has allowed criminals to exploit them for theft,” he said. The proposed bill would require crypto ATMs to display warnings about potential scams, urging users to contact law enforcement if they suspect fraudulent activity. It would also remind users that funds lost in scams are often irretrievable.
In 2023, North Dakota residents reported 103 crypto scam complaints to the FBI, resulting in a combined loss of $6.5 million. On a national level, the FBI recorded $5.6 billion in crypto-related fraud last year, including over 5,500 cases involving crypto ATMs, which accounted for $189 million in losses. These figures highlight the growing concerns around the security of crypto ATMs, which allow users to buy digital currencies but often lack the same protections as traditional ATMs.
The bill has received widespread support from people including Josh Askvig, director of the American Association of Retired Persons in North Dakota. Askvig highlighted that the bill could protect elderly residents, who are often targeted by scammers. “This bill has the potential to protect some of our most vulnerable citizens,” he said.
However, the bill has faced opposition from within the crypto industry. Kevin Lolli, assistant general counsel for CoinFlip, a major crypto ATM operator, expressed support for the consumer protection aspects of the bill but raised concerns about proposed transaction limits and fee caps. Crypto ATM fees, typically ranging from 8% to 20%, reflecting operational costs such as hardware maintenance, armoured vehicle services, and rent payments to host businesses, Lolli explained.
According to Coin ATM Radar, there are nearly 30,000 crypto ATMs in the U.S., and many machines already report suspicious transactions to federal authorities, such as those exceeding $2,000 or large withdrawals over $10,000. Despite these measures, the absence of consistent consumer protections has raised alarms among regulators.
Apart from North Dakota, other countries are also looking into tackling crypto ATM scams. Recently, Australia’s financial intelligence agency, AUSTRAC, has recently announced a task force aimed at cracking down on crypto ATM providers violating anti-money laundering regulations.
