North Dakota Senate Passes the Crypto ATM Bill to Create a Licensing Regime

In this case, the bill initiates that virtual currency kiosk operators obtain money transmitter licenses and use blockchain methods to detect fraud

The North Dakota Senate passed the crypto ATM bill to create a licensing regime.

In this case, the bill initiates that virtual currency kiosk operators obtain money transmitter licenses and use blockchain methods to detect fraud, also limiting daily transactions to $2000. Initially, the bill stipulated a $1,000 daily cap.

As a way of overcoming scams, the bill also requires submission of quarterly reports as well as appointment of compliance officers. The bill which was introduced to the Senate on Jan. 15 passed with a 45-to-1 vote on March 18 and prioritises protecting residents from scams by introducing new guidelines for crypto ATMs and their operators.

This comes as a result of increased concerns over crypto ATM scams with stats from Chainalysis revealing that at least $160 million illicit transactions were facilitated by crypto kiosks.

According to the bill, crypto ATM operators will be required to use blockchain analytics to detect and report suspicious activities as fraud to the North Dakota Office of the Attorney General.

During a hearing on Jan. 22, the bill’s primary sponsor, house representative Steve Swiontek argued that crypto ATMs in the U.S. lack sufficient protection measures which might have allowed criminals into exploiting them for theft.

He added that these machines are a target for fraudsters. In addition, House Bill 1250 will impose a $2,000 daily transaction limit on crypto ATM users.

The bill also requires operators to submit quarterly reports on suspicious activity to the attorney general and appoint a compliance officer who will be responsible for implementing and maintaining the required programs.

House Bill 1250 was introduced to the House on Jan. 15 and passed on March 11 with an 89-to-0 vote. It is now being sent to North Dakota Governor Doug Burgum to be signed into law.

The bill comes amid a surge in crypto ATM scams.

Earlier this year, a man was jailed for 18 weeks after scamming people at a Bitcoin ATM in London, while a woman was reportedly conned out of $15,000 at a crypto ATM in a bid to save her husband from arrest.

The Financial Conduct Authority, the markets regulator in the United Kingdom, has also been stepping up its crackdown on unregistered crypto firms and operators.

Recently, a court in the UK sentenced a man to four years in prison for illegally operating crypto ATMs across the country. Olumide Osunkoya pleaded guilty to charges in October.

The judge, Sarah Judge, said that Osunkoya was "undeterred" by previous warnings from the authorities and continued to operate the machines in a "flagrant disregard" for the law.

"The offences were serious and persistent, and the defendant showed no remorse," Judge said.

The FCA has been waging a war against unregistered crypto firms and operators. Last year, the regulator issued a warning to consumers about the risks of investing in crypto assets.

The regulator also began a campaign to identify and shut down unregistered crypto firms and operators.

In addition, the FCA has been working with the government to introduce new legislation to regulate the crypto industry.

The U.S. Congress is also considering new legislation to regulate crypto. A new federal law was proposed on Feb. 25 by U.S. Senator Dick Durbin.

The proposed legislation, which is an amendment to the Paycheck Protection Program, would make it illegal to use, induce another person to use, or attempt to use a virtual currency kiosk for the purpose of depositing or withdrawing more than $1,000 in currency in a single 24-hour period with the intent to defraud.

It would also create an offense for aiding, abetting, counselling, procuring, or warranting the use of a virtual currency kiosk in commission of an offense.

The new proposal follows a case in January where a woman was reportedly conned out of $15,000 at a crypto ATM.

The aim was to help her husband who was on the phone to a scammer at the time. The scammer threatened to have the woman’s husband arrested unless she deposited 10 bitcoins.

According to data from Coin ATM Radar, the U.S. has the most Bitcoin ATMs, making up 78% of the global market. As of March 14, there are 165,666 crypto ATMs in the world.

However, the rate of installation seems to have slowed down in recent months.

Earlier this year, the State of Nebraska passed the Controllable Electronic Record Fraud Prevention Act. The legislation, which was signed into law by Governor Jim Pilen on March 13, aims to combat fraud.

It is pertinent to note that crypto ATM use has surged during the pandemic.

With cases of fraud on the rise, lawmakers are looking to introduce new guidelines for crypto ATMs and their operators.