TL;DR
- New Regulatory Mandate: Nebraska’s new law requires crypto ATM operators to be licensed under the Nebraska Money Transmitters Act and registered with the Department of Banking and Finance.
- Consumer Protection Measures: The law sets strict transaction limits, caps fees at 18% of transaction value, and ensures full refunds for fraud reported within 90 days.
- Proactive Fraud Combat: Signed by Governor Jim Pillen as part of a bipartisan initiative, the legislation targets the rising crypto ATM fraud, positioning Nebraska as a leader in secure crypto practices.
Nebraska has taken a significant step to protect its citizens from cryptocurrency fraud by enacting a new law aimed at regulating crypto ATMs and kiosks. On March 12, Governor Jim Pillen signed the Controllable Electronic Record Fraud Prevention Act into law. This bipartisan legislation, introduced by State Senator Eliot Bostar, aims to safeguard users of cryptocurrency kiosks and ATMs from fraudulent activities.
The law mandates that operators of these machines must be licensed under the Nebraska Money Transmitters Act and registered with the Department of Banking and Finance. Governor Pillen emphasized that the new law is part of Nebraska’s efforts to become a leader in the crypto industry while ensuring consumer protection.
Key Provisions of the Law
The new law requires crypto ATM operators to provide clear and bold disclosures about the terms of their services, including warnings about potential fraud. Operators must submit quarterly reports detailing the locations of their kiosks, transaction data, and the names of the operators.
The legislation also sets transaction limits of $2,000 per day for new users and $5,000 per day for existing customers. Additionally, fees charged by the operators cannot exceed 18% of the transaction value. To further protect consumers, the law stipulates that new customers who report fraud within 90 days are eligible for a full refund, including fees.
Existing customers can receive refunds for fees associated with fraudulent transactions. Operators are also required to display fraud warnings and appoint a compliance officer to enforce anti-fraud measures.
Broader Implications for the Crypto Industry
The enactment of this law comes at a time when fraud related to cryptocurrency ATMs is on the rise. According to the Federal Trade Commission, victims lost over $65 million to Bitcoin ATM fraud in the first half of 2024 alone.
The new regulations aim to curb such losses and provide a safer environment for cryptocurrency transactions in Nebraska. Kelly Lammers, Director of the Nebraska Department of Banking, stated that the state is “open for business” in the cryptocurrency space but will closely monitor those who exploit Nebraskans through crypto ATMs.
The law’s passage reflects Nebraska’s proactive approach to addressing the evolving risks associated with cryptocurrency transactions and supporting the growth of a safe and robust crypto industry within the state.
As Nebraska continues to lay the groundwork for a secure crypto industry, the new law serves as a model for other states looking to protect their citizens from cryptocurrency fraud.
