Nebraska Enacts New Crypto ATM Regulations: What Will Change?
Nebraska has tightened regulations on cryptocurrency ATMs. The new law mandates licensing, sets transaction limits, and requires operators to inform users about potential fraud risks.
Nebraska Governor Jim Pillen has signed LB609 into law to regulate cryptocurrency ATM operators and enhance user protection against fraud. The legislation requires operators to obtain a license, set transaction limits, display risk warnings, and refund victims of scams.
Crypto ATM fraud has become a serious issue in the U.S. According to the Federal Trade Commission (FTC), victims lost over $65 million to crypto scams in the first half of 2024 alone. Moreover, between 2020 and 2023, total losses surged nearly tenfold.
Typically, fraudsters use crypto ATMs to deceive users into transferring funds by impersonating government officials, tech support agents, or even romantic partners. The new regulations are designed to mitigate these risks.
Governor Jim Pillen described the law as a crucial step in Nebraska’s efforts to establish itself as a hub for the crypto industry:
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,
he said.
Meanwhile, Nebraska Department of Banking and Finance Director Kelly Lammers stated that authorities will closely monitor crypto ATM operators and take swift action against any violations.
Related: Where are crypto ATMs most popular?
How Will This Affect Operators and Users?
The new law requires all crypto ATM operators to obtain a license under the Nebraska Money Transmitters Act and register with the State Department of Banking and Finance. Additionally, they must submit quarterly reports detailing kiosk locations, owner identities, and transaction data.
Furthermore, the law introduces new transaction limits:
- New users can transfer up to $2,000 per day
- Regular customers will have a $5,000 daily limit
- Transaction fees cannot exceed 18% of the transfer amount
To safeguard users, all crypto ATMs must display fraud risk warnings. Additionally, operators are required to appoint a compliance officer to oversee regulatory compliance.
If a new user becomes a victim of fraud and reports it within 90 days, they will receive a full refund, including transaction fees. Regular customers may only be eligible for a refund of transaction fees.
Crypto ATMs Under Regulatory Scrutiny
Other states are also tightening controls. For example, Sen. Dick Durbin has introduced the Crypto ATM Fraud Prevention Act, a federal bill designed to combat fraud in the crypto ATM sector.
As a result of increasing regulatory pressure, the number of crypto ATMs in the U.S. declined by more than 1,200 in March alone.
While Nebraska supports the growth of the crypto industry, it has yet to join the 21 states that have proposed creating strategic crypto reserves.
Related: 5 U.S. States Considering BTC Reserves
With LB609 set to take effect soon, crypto ATM operators must obtain licenses, update their machines, and comply with new regulations. Those who fail to meet the requirements risk fines or even business shutdowns.
Nebraska is among the first states to implement strict regulations for cryptocurrency ATMs. This move could set a precedent for other U.S. states as concerns over fraud in the industry continue to rise.
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