Nebraska is making a major move to protect residents from scams involving cryptocurrency by introducing new rules regarding kiosks and ATMs that use crypto. Gov. Jim Pillen signed the bill into law on the 12th of March to strengthen protection against fraudulent transactions, as ATM fraud is on the rise all over the U.S.3
“Cryptocurrency is an important, emerging industry, and we’ve been working hard to position Nebraska as a leader in this space,” Governor Pillen stated. “A key part of that effort is ensuring we have proper safeguards to prevent criminals from taking advantage of Nebraskans.”
The legislation, which is titled the Controllable Electronic Record Fraud Prevention Act, provides important protections for cryptocurrency ATM users, which include the requirement for licensing and limits on transactions. It was proposed by Senator Eliot Bostar on January 22 as Bill LB 609 and got bipartisan support.
What Does the Law Change?
The new rules: the operators of kiosks and ATMs have to be licensed under the Nebraska Money Transmitters Act. Also, they must be approved by the Department of Banking and Finance and provide quarterly reports that include information about the location, names of operators, and information about transactions.
The limits on transactions are in place – the new users are allowed to transact only $2000 per day. Existing customers can have a limit of $5,000 per day.
Fee caps: Fees can’t exceed 18% of the total value of transactions, which can help stop excessive charges.
Refunds and protection from fraud – Anyone who reports fraud within the first 90 days will be given a complete refund and will also be reimbursed for costs. Customers who have already used the service can receive a reimbursement on fees associated with fraud-related transactions.
Greater awareness of the consumer – ATMs need to display fraud alerts, and ATM operators are required to designate a compliance officer who will supervise the prevention of fraud.
The measures are coming at a time when the amount of fraud through Bitcoin ATMs has increased dramatically. According to the Federal Trade Commission, the victims suffered losses of more than 65 million dollars in the crypto ATM scams in the initial quarter of 2024. These kinds of frauds increased tenfold between the years 2020 and 2023.
Nebraska’s Stance on Crypto
Despite the emphasis on the prevention of fraud, Nebraska remains supportive of innovations in cryptocurrency. “Nebraska is open for business in the cryptocurrency space,” stated Kelly Lammers, director of the State’s Department of Banking. He also stressed that state authorities are increasing efforts to clamp down on fraud targeted at the state’s residents.
This move is coming as other states adopt similar measures. This month, the U.S. crypto ATM network has shrunk by nearly 1,200 ATMs after Illinois adopted its regulatory procedures.
Although Nebraska is determined to make cryptocurrency safer, the state is not yet a member of the 21 states that have submitted legislation for the creation of cryptocurrency reserves that are officially recognized.
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