North Dakota Senate Passes Bill Imposing Stricter Regulations on Crypto ATMs

North Dakota is tightening its grip on cryptocurrency ATMs with a new bill aimed at curbing fraud and enhancing oversight.

On March 18, the state’s Senate overwhelmingly approved House Bill 1447 in a 45-1 vote, moving it closer to becoming law.

Initially introduced in January, the bill seeks to protect residents from crypto-related scams by enforcing stricter operational requirements on ATM operators. If signed into law, it would mandate that all crypto ATM operators obtain a money transmitter license, impose a $2,000 daily transaction limit, and require fraud warning notices at kiosks. Additionally, operators would need to submit quarterly reports detailing ATM locations, transaction data, and business ownership.

The bill has undergone several revisions since its introduction. Lawmakers initially proposed a $1,000 daily cap, later adjusting it to $2,000 for the first five transactions within 30 days. However, the Senate has now streamlined the limit to a flat $2,000 per day.

Another key provision requires ATM operators to implement blockchain analytics to detect suspicious transactions and report potential fraud to authorities. The bill now returns to the House for approval of these amendments before heading to Governor Kelly Armstrong for final consideration.

The push for tighter regulations comes amid a rise in crypto ATM-related scams. During a January 22 hearing, Lisa Kruse, North Dakota’s financial institutions commissioner, revealed that 103 crypto scam complaints were filed with the FBI in 2023, resulting in $6.5 million in reported losses.

Bill sponsor Representative Steve Swiontek has emphasized the urgent need for regulation, stating that the absence of clear oversight has turned crypto ATMs into a prime target for fraudsters.

With nearly 30,000 crypto ATMs in operation across the U.S., several states are taking action against fraudulent activities. Last week, Nebraska Governor Jim Pillen signed the Controllable Electronic Record Fraud Prevention Act into law, implementing similar licensing and reporting requirements for crypto ATM operators.

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