Nebraska Governor Signs New Bill to Regulate Crypto ATMs

The recent legislation signed by Nebraska Governor Jim Pillen marks a significant step towards protecting users of cryptocurrency kiosks and ATMs in the state. With the rise of cryptocurrency fraud becoming a pressing issue across the United States, this new law aims to establish a safer environment for crypto transactions.

Understanding the New Legislation

On March 12, 2024, Governor Pillen emphasized the importance of cryptocurrency as an emerging industry while announcing the signing of the bill. He stated, “Cryptocurrency is an important, emerging industry, and we’ve been working hard to build Nebraska into a cryptocurrency leader.” This bipartisan legislation, known as the “Controllable Electronic Record Fraud Prevention Act,” is designed to combat fraud and protect users of crypto kiosks and ATMs.

Rising Fraud Statistics

According to the Federal Trade Commission (FTC), victims have lost over $65 million to crypto ATM fraud in just the first half of 2024. The FTC reported that fraud losses at Bitcoin ATMs (BTMs) have skyrocketed, increasing nearly tenfold from 2020 to 2023. This alarming trend highlights the urgent need for regulatory measures to safeguard consumers.

Key Provisions of the Bill

The legislation, introduced on January 22 by Senator Eliot Bostar, mandates that crypto ATM and kiosk operators must be licensed under Nebraska’s Money Transmitters Act. Furthermore, these operators must be registered and approved by the Department of Banking and Finance. This regulatory framework aims to ensure that only legitimate operators can provide crypto services in the state.

One of the key features of the new law is the requirement for operators to provide quarterly reports detailing kiosk locations, operator names, and transaction data. This transparency is crucial for monitoring activities and preventing fraudulent practices.

Transaction and Fee Limits

To further protect consumers, the legislation implements transaction limits. New users will be restricted to a maximum of $2,000 per day, while existing customers can transact up to $5,000 per day. Additionally, fees charged by operators cannot exceed 18% of the transaction value. This cap on fees is designed to prevent excessive charges that could exploit vulnerable users.

Fraud Protection Measures

In an effort to enhance consumer protection, the bill also includes provisions for refunds in cases of fraud. New customers who report fraudulent activity within 90 days are eligible for a full refund, including any fees incurred. Existing customers can receive refunds for fees associated with fraudulent transactions, providing an added layer of security for users.

State Commitment to Cryptocurrency

Kelly Lammers, the director of the state Department of Banking, expressed optimism about Nebraska’s position in the cryptocurrency market. “Nebraska is open for business in the cryptocurrency space,” Lammers stated. He also assured citizens that a dedicated team would be monitoring activities closely to protect them from fraudsters who target users through crypto ATMs.

Future of Cryptocurrency Regulation in Nebraska

While Nebraska has taken significant steps to regulate crypto ATMs, it has yet to join the 21 U.S. states that have proposed legislation to establish strategic crypto reserves, as noted by the Bitcoin Reserve Monitor. This indicates that while the state is proactive in addressing fraud, there is still room for growth in its overall cryptocurrency strategy.

As the cryptocurrency landscape continues to evolve, the new legislation in Nebraska serves as a model for other states grappling with similar issues. By implementing robust regulations and protective measures, Nebraska aims to foster a safer environment for cryptocurrency transactions, ultimately positioning itself as a leader in the industry.

For more information on this legislation, you can read the original article here.