North Dakota Senate Passes HB 1447, reinstating a $2000 daily limit on crypto ATM transactions

The North Dakota Senate passed House Bill 1447, reinstating a $2000 daily limit on crypto ATM transactions.

The North Dakota Senate has passed House Bill 1447, which sets a $2,000 daily limit on cryptocurrency ATM transactions in the state. The bill, which was approved in a 45-to-1 vote on March 18, now returns to the House for approval before reaching Governor Kelly Armstrong.

Originally, the bill proposed a $1,000 daily limit, but a House committee increased the cap last month. The revised version allowed $2,000 per day but restricted users to five such transactions within 30 days. The Senate version further removed the 30-day restriction, effectively enforcing a flat $2,000 daily limit.

The bill also introduces new regulations for crypto ATM operators, requiring them to obtain a money transmitter license to operate in North Dakota and comply with reporting requirements. Operators must submit quarterly reports with details on transactions over $10,000, suspicious activity reports (SARs), and any consumer complaints received.

Moreover, operators must use blockchain analytics to monitor for fraud and suspicious activity, reporting any concerns to the Department of Banking and report any issues encountered to consumers. They must also post fraud warnings on ATMs, advise consumers about the risks of crypto transactions, and provide contact information for reporting fraud.

Lawmakers expressed concerns about fraud in crypto ATM transactions, with Representative Steve Swiontek, who introduced the bill, highlighting the use of crypto ATMs by criminals for fraud and theft. He emphasized the need to protect consumers from exploitation by those engaging in opportunistic criminal activity.

Several states have passed similar laws to regulate crypto ATM transactions and prevent fraud. On March 13, Nebraska Governor Jim Pillen signed the Controllable Electronic Record Fraud Prevention Act to address crypto ATM scams, while at the federal level, Senator Dick Durbin introduced a bill on February 25 after a $15,000 crypto ATM scam was reported.

In this instance, a victim was tricked by a caller who threatened arrest and demanded payment in crypto to cancel an alleged warrant for the victim's arrest. The caller instructed the victim to use a crypto ATM at a specific gas station to make the demanded transfer.

Reports of fraud involving crypto ATMs and other crypto payment methods have increased, with a September 2023 report from the Federal Trade Commission (FTC) revealing that Bitcoin ATM fraud losses grew nearly tenfold between 2020 and 2023.

Losses from crypto and blockchain scams exceeded $65 million in the first half of 2024, with individuals aged 60 and older three times more likely to fall victim to such scams.

Despite the concerns over crypto ATM fraud, the United States remains the leader in crypto ATM installations, hosting 29,822 machines, which represents 78% of the global market share, according to Coin ATM Radar.

Canada follows with 3,486 crypto ATMs, which is 9.2% of the market, while Australia ranks third with 1,613 ATMs, or 4.3% of the market. Overall, the North Dakota crypto ATM bill is part of broader efforts by state and federal lawmakers to regulate crypto transactions and prevent fraud as crypto adoption continues to rise.