Lawmakers in North Dakota have introduced a bill aimed at restricting crypto ATM transactions to protect residents from fraud.
House Bill 1447 was put forward on January 15 to the state legislature after 103 state residents reported losing $6.5 million to crypto scams in 2023. Sponsored primarily by Representative Steve Swiontek, the bill seeks to establish essential consumer protections to combat these frauds.
The proposed legislation would limit daily ATM withdrawals to $1,000 and cap transaction fees at $5 or 3% of the total amount, whichever is higher.
Lisa Kruse, commissioner of the North Dakota Department of Financial Institutions, highlighted the rise in crypto-related fraud complaints. On Wednesday, Kruse addressed the House Industry, Business, and Labor Committee, underscoring the $6.5 million in losses in 2023.
According to an FBI report in September 2024, Americans lost $5.6 billion to cryptocurrency fraud in 2023 alone. Additionally, 5,500 fraud cases involved cryptocurrency ATMs, resulting in losses exceeding $189 million.
During the Wednesday Committee hearing, Swiontek pointed out that currently, crypto ATMs lack the protection measures that traditional ATMs have. “Unfortunately, this has allowed criminals to exploit them for theft,” Swiontek stated.
Meanwhile, Josh Askvig, North Dakota director of the American Association of Retired Persons, mentioned that the legislation would aid elderly residents in avoiding crypto scams.
The bill stated that ATMs should display warnings about fraud and advise users to contact law enforcement if they suspect a scam. It should also include a cautionary message that funds lost in fraud may not be recoverable.
Kevin Lolli from crypto ATM operator CoinFlip expressed opposition to the bill’s fee and transaction limits clause but supported the proposed consumer protection. Lolli informed state lawmakers that reduced fees would impact ATM operators’ ability to cover expenses such as hardware, maintenance, and rental costs to local businesses hosting the machine. Currently, ATM operators typically charge a fee between 8% and 20%.
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