Wisconsin Proposes Crypto ATM Regulations with KYC Rules and Fee Caps

Lawmakers in the US state of Wisconsin have introduced Senate Bill 386, a companion measure to Assembly Bill 384, both aimed at addressing the growing problem of scams associated with crypto ATMs. The bills, led by Senator Kelda Roys and Representative Ryan Spaude, propose a range of regulatory requirements intended to increase transparency and accountability within the sector [1].

Under the proposed legislation, operators of crypto ATMs would be required to obtain money transmitting licenses and comply with Know-Your-Customer (KYC) rules. This includes collecting personal information such as name, date of birth, and government-issued photo identification from users [1]. The bills also set a daily transaction cap of $1,000 and mandate the display of fraud warnings on the machines to alert users to the risks associated with these transactions [2].

The legislation seeks to address concerns over the high fees associated with crypto ATM transactions, which have been a point of contention among users. The bills propose capping fees at either a flat $5 or 3% of the transaction value, whichever is higher. Additionally, operators would be required to reimburse customers if transactions are later confirmed to be fraudulent by law enforcement within 30 days [1].

This legislative effort aligns with broader regulatory trends in the United States, where states are increasingly imposing oversight on crypto kiosks to combat financial crime. The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has also issued warnings about the use of crypto ATMs for illicit activities such as fraud, cybercrime, and drug trafficking. FinCEN Director Andrea Gacki has emphasized the need for financial institutions to report suspicious transactions via these machines [1].

Wisconsin’s approach is part of a global movement to tighten regulations on crypto ATMs. For instance, New Zealand has banned crypto ATMs nationwide, while the UK has conducted raids targeting illicit operations. These developments highlight the growing consensus among regulators that unregulated crypto kiosks pose significant risks to consumer protection and public safety [1].

Critics of the Wisconsin bills have raised concerns about potential privacy implications, noting that the stringent KYC requirements could erode the anonymity traditionally associated with cryptocurrency. However, proponents argue that these measures are necessary to prevent fraud and protect vulnerable populations, particularly the elderly, from becoming victims of scams [1].

The legislation is still in its early stages and will undergo further debate and potential amendments before it can become law. Its success will depend on how effectively it is implemented and enforced, as well as whether it can adapt to the evolving nature of the crypto market [4].

Source: [1] Wisconsin Lawmakers Introduce Bill to Regulate Crypto ... (https://www.binance.com/en/square/post/28249924965145)

[2] Wisconsin Democrats File Senate Companion Bill to Rein ... (https://decrypt.co/334686/wisconsin-democrats-senate-companion-bill-rein-in-crypto-kiosks)

[4] Bitcoin News Today: Wisconsin Proposes Strict KYC Rules ... (https://www.ainvest.com/news/bitcoin-news-today-wisconsin-proposes-strict-kyc-rules-crypto-atms-combat-99-fraud-surge-2508/)