Nebraska Governor Jim Pillen Signs LB 609 to Regulate Crypto ATMs

Nebraska Governor Jim Pillen has signed LB 609, a bill to regulate crypto ATMs and kiosks, citing growing fraud cases.

output: As cases of fraud are on the rise, Governor Jim Pillen has signed LB 609 to regulate crypto ATMs and kiosks. The new law, named the Controllable Electronic Record Fraud Prevention Act, will impose licensing requirements, transaction limits, and fraud prevention measures on operators.

Pillen highlighted the urgent need for such regulation as new fraud scams are rapidly emerging, especially in the realm of cryptocurrency.

“Cryptocurrency is an important, emerging industry, and we’ve been working hard to build Nebraska into a cryptocurrency leader,” said Pillen on March 12.

“But we need to be vigilant against those who would defraud others. This bill will help to establish the necessary guardrails to prevent such activities.”

The legislation, known as LB 609, will require all crypto ATM operators to be licensed under Nebraska’s Money Transmitters Act.

It mandates operators to register with the Department of Banking and Finance before installing or managing machines in the state.

Furthermore, operators will be required to submit reports on a quarterly basis, detailing the locations of kiosks, transaction volume, and customer data. These records will be used to monitor suspicious activity and deter fraud.

In addition, crypto kiosk operators will be required to display fraud warnings at their machines, and each operator must appoint a compliance officer to enforce security measures.

The new law also sets limits on transactions for crypto ATM users. For new customers, the daily withdrawal limit will be $2,000, while existing customers will have a limit of $5,000.

These restrictions are part of broader efforts to reduce large-scale fraud cases.

The bill also caps transaction fees at 18% of the total value. A major concern regarding crypto ATMs has been the high fees charged by some machines.

For fraud victims, the bill outlines refund policies. New users who report fraud within 90 days will receive a full refund, including fees.

Existing users can claim a refund for fees lost in fraudulent transactions.

According to the Federal Trade Commission (FTC), the first half of 2024 saw $65 million in losses due to crypto ATM fraud.

The FTC report also notes that Bitcoin ATM (BTM) fraud has increased nearly tenfold since 2020 to 2023.

Other states have also introduced regulations on crypto ATMs. In Illinois, a recent law has led to the removal of 1,200 crypto ATMs after Senator Dick Durbin introduced new restrictions on money transmitters.

State Department of Banking director Kelly Lammers said the state will be increasing its monitoring of crypto ATMs.

“We are going to be increasing our ability to monitor those types of activities even more closely,”

he said.

“Nebraska is open for business in the cryptocurrency space. Those that target our citizens … using crypto ATMs as part of their transfer method, we will soon have a team that will be watching even more closely.”