Nebraska Enacts Crypto ATM Regulations to Combat Fraud

Nebraska Governor Jim Pillen has signed into law the Controllable Electronic Record Fraud Prevention Act, a bipartisan legislation aimed at regulating cryptocurrency ATMs within the state. This move comes in response to the escalating number of fraudulent activities linked to crypto ATMs, which have become a significant concern, particularly for vulnerable populations.

The new law, introduced by Senator Eliot Bostar, mandates that operators of crypto ATMs and kiosks must be licensed under Nebraska’s Money Transmitters Act and registered with the Department of Banking and Finance. This registration process includes providing quarterly reports on kiosk locations, names, and transaction data. The legislation also imposes transaction limits of $2,000 per day for new users and $5,000 per day for existing customers, with fees not exceeding 18% of the transaction value.

To further protect users, the law stipulates that new customers who report fraud within 90 days can receive a full refund, including fees, while existing customers can be refunded for the fees associated with fraudulent transactions. Additionally, kiosk operators must display fraud warnings and appoint a compliance officer to enforce fraud prevention measures. These regulations are designed to curb the growing trend of fraudulent activities and enhance protections against crypto scams, ensuring that individuals are better safeguarded from falling victim to these deceptive practices.

Governor Pillen emphasized the importance of these regulations, stating, “Cryptocurrency is an important, emerging industry, and we’ve been working hard to build Nebraska into a cryptocurrency leader. An important part of these efforts is to make sure that we have guardrails to prevent criminals from taking advantage of Nebraskans.” This legislation is part of a broader effort to protect consumers from the risks associated with cryptocurrency, creating a safer environment for those who use these machines and ensuring that their transactions are secure and legitimate.

The signing of this bill underscores the importance of regulatory measures in the cryptocurrency space. As the use of cryptocurrency continues to grow, so does the need for robust regulations to protect consumers from fraudulent activities. The new law in Nebraska serves as a model for other states looking to implement similar measures to safeguard their citizens from crypto-related scams. By taking a proactive step towards addressing the issue of crypto-related fraud, Governor Pillen has demonstrated a commitment to protecting Nebraskans and fostering a responsible cryptocurrency industry within the state.