The surge in cryptocurrency fraud has prompted urgent legislative action in Nebraska. Governor Jim Pillen recently signed a bipartisan bill, known as the Controllable Electronic Record Fraud Prevention Act, aimed at protecting users of crypto kiosks and ATMs. This legislation responds to a disturbing rise in fraudulent activities associated with crypto transactions in the state.
Governor Pillen emphasized the importance of establishing safety measures. “Cryptocurrency is an important, emerging industry, and we’ve been working hard to build Nebraska into a cryptocurrency leader,” he stated. The new law will impose strict regulations on crypto ATM operators to safeguard users against financial crimes.
According to reports, the Federal Trade Commission noted that crypto ATM fraud has resulted in over $65 million in losses in just the first half of 2024. The trend indicates that fraud incidents related to Bitcoin ATMs have increased nearly tenfold since 2020, highlighting the pressing need for regulatory measures.
- The bill requires crypto ATM operators to be licensed under Nebraska’s Money Transmitters Act.
- Operators must provide quarterly reports detailing transaction data and machine locations.
- Transaction limits have been established – new users can transact up to $2,000 per day, while existing customers can transact up to $5,000 per day.
- Service fees are capped at 18% of the transaction value.
Further protections include refunds for new customers who report fraud within 90 days, covering both the amount lost and the associated fees. Furthermore, operators are mandated to display fraud warnings prominently and must appoint a compliance officer to oversee adherence to prevention measures.
The introduction of this legislation aligns with broader efforts across the United States, where similar regulatory actions have led to a contraction of over 1,200 crypto ATMs nationwide. While Nebraska remains supportive of the cryptocurrency landscape, it has yet to follow the lead of 21 other states aiming to establish strategic crypto reserves.
As the Department of Banking director, Kelly Lammers, remarked, “Nebraska is open for business in the cryptocurrency space,” while ensuring increased vigilance against those who exploit vulnerable consumers. This proactive approach marks a significant step in safeguarding Nebraskans engaging with crypto technology.
The new regulations will not only help mitigate fraud risks but also enhance trust within the cryptocurrency market, potentially positioning Nebraska as a model for other states grappling with similar issues.
