In a significant move to curb cryptocurrency scams, the North Dakota Senate has passed House Bill 1447, which aims to regulate the operations of crypto ATMs in the state. On March 18, the Senate voted overwhelmingly in favor of the bill, with a final vote of 45-1. The bill mandates that crypto ATM operators obtain a money transmitter license, a requirement that ensures compliance with state financial regulations. This legislation also introduces strict measures to protect consumers from potential fraud.

One of the primary provisions of House Bill 1447 is the reinstatement of a $2,000 per-user, per-day transaction limit at crypto ATMs. This limitation is designed to prevent large-scale fraudulent activity and protect consumers from financial losses. The bill also stipulates that operators must post fraud warning notices on their machines, ensuring that users are aware of the risks associated with crypto transactions.

To further enhance consumer safety, operators are required to implement blockchain analytics technology to monitor and track suspicious transactions. This system will help identify and flag potentially fraudulent activities in real time. Additionally, operators will be required to report quarterly data, including the locations of their kiosks, operator identities, and transaction details, to relevant regulatory authorities.

The bill was introduced to address the growing concerns surrounding crypto ATM scams, which have become more prevalent in recent years. House Representative Steve Swiontek, who sponsored the bill, emphasized the importance of protecting consumers from scammers who exploit the lack of oversight in the crypto ATM industry. In 2023 alone, the FBI received over 5,500 complaints related to crypto ATMs, with estimated losses exceeding $6 million in North Dakota.

House Bill 1447 comes at a time when similar regulatory actions are being taken across the country. Just days before North Dakota’s Senate vote, Nebraska Governor Jim Pillen signed the Controllable Electronic Record Fraud Prevention Act into law, imposing similar restrictions on crypto ATMs in the state. At the federal level, Illinois Senator Dick Durbin introduced legislation aimed at protecting vulnerable adults from cryptocurrency ATM scams.

The next step for House Bill 1447 is a final passage in the North Dakota House before being sent to Governor Kelly Armstrong for signature. If signed into law, North Dakota will set a new precedent in consumer protection within the cryptocurrency sector, signaling a nationwide effort to address the increasing risks of crypto ATM fraud.