In a bid to protect residents from crypto scams, North Dakota lawmakers have introduced a new bill targeting crypto ATMs. With scams running rampant and millions lost to fraud, House Bill 1447 seeks to introduce stricter regulations on crypto ATM operations to curb the growing problem and ensure consumer safety.
Fighting Back Against Crypto Fraud: The Numbers Don’t Lie
On January 15, 2025, North Dakota’s legislative assembly saw the introduction of House Bill 1447, a bill designed to tackle the rising tide of crypto scams. The bill, which was presented to the House Industry, Business, and Labor Committee, proposes to cap withdrawals from crypto ATMs at $1,000 per day, impose a transaction fee cap, and introduce clear fraud warnings on the machines.
Why the urgency? In 2023, North Dakota residents filed 103 complaints with the FBI about crypto scams, leading to a combined loss of $6.5 million. The state’s Department of Financial Institutions commissioner, Lisa Kruse, shared this grim statistic with lawmakers during the hearing, underscoring the need for immediate action.
But the problem isn’t unique to North Dakota. Nationally, the FBI reported that Americans lost a staggering $5.6 billion to crypto fraud in 2023. A significant chunk of those scams involved crypto ATMs, which have become a prime target for fraudsters. According to the FBI, more than $189 million was lost through crypto ATMs alone, with over 5,500 cases being reported.
What’s in the Bill?
House Bill 1447 takes aim at crypto ATMs, with a series of provisions designed to protect consumers and crack down on fraud. Here’s a breakdown of what the bill proposes:
- Withdrawal Limits: Customers would be capped at $1,000 per day for crypto ATM transactions.
- Fee Caps: Transaction fees would be limited to $5 per transaction or 3% of the total transaction, whichever is higher.
- Fraud Warnings: Crypto ATMs would be required to issue clear warnings about the potential for scams, advising users to contact law enforcement if they suspect fraud.
- Non-recoverable Funds: The bill would also require ATMs to notify users that any funds lost due to error or fraud may not be recoverable.
These measures are part of a larger push to ensure that crypto ATMs are subject to similar protections as traditional cash ATMs, which have built-in security features and consumer safeguards. House Representative Steve Swiontek, the primary sponsor of the bill, pointed out that crypto ATMs currently lack these protections, which makes them an easy target for criminals looking to exploit unsuspecting victims.
“Unfortunately, this has allowed criminals to exploit them for theft,” said Swiontek, who has a background as a former president and CEO of Gate City Bank. His experience in the financial sector has fueled his push for consumer protection.
Protecting the Vulnerable: A Step Towards Consumer Safety
One of the key focuses of this bill is protecting North Dakota’s elderly population, who are often the most vulnerable targets of scams. Josh Askvig, the state director of the American Association of Retired Persons (AARP), praised the bill for its focus on consumer safety, particularly for senior citizens who may not be as familiar with crypto technologies and their risks.
“Too many elderly residents have had their life savings stolen through crypto scams,” Askvig said. “This bill is an important step toward creating the protections they need.”
In addition to fraud warnings, the bill requires that crypto ATMs advise users to reach out to law enforcement if they suspect they’re being scammed. It would also make it clear that funds lost through fraud or error may not be recoverable—something many users might not realize until it’s too late.
Industry Pushback: Will It Affect Crypto ATM Operators?
While many are in favor of the bill’s consumer protection measures, not everyone is on board. Kevin Lolli, assistant general counsel for crypto ATM operator CoinFlip, voiced concerns at the hearing about the potential impact of the transaction limits and fee caps.
Crypto ATMs typically charge fees ranging from 8% to 20% to cover operational costs like hardware, maintenance, armored car services, and rent for hosting locations. Lolli argued that the proposed fee and transaction limits could make it financially unfeasible for crypto ATM operators to continue running their machines, especially when factoring in the costs associated with providing the service.
“Crypto ATMs are expensive to operate, and the proposed fee limits could hurt the sustainability of the business,” Lolli explained. “Some machines already report suspicious transactions, and we work with authorities to flag large transactions over $2,000, but these measures may limit our ability to offer services effectively.”
It’s worth noting that some crypto ATMs already report suspicious transactions exceeding $2,000 and are required to notify US authorities of transactions above $10,000.
The Crypto ATM Landscape: A Growing Concern
With over 37,000 crypto ATMs now operating worldwide, nearly 30,000 of which are located in the US, the industry is booming—but it’s also drawing more scrutiny. As crypto adoption grows, so does the number of scams and fraud attempts tied to crypto ATMs. The Coin ATM Radar reports that there are more than 37,000 crypto ATMs in operation across 65 countries, and the US has become a hotbed for these machines.
As North Dakota’s lawmakers continue to debate the bill, it’s clear that crypto ATMs are entering a new phase of regulation. Other states may soon follow suit, enacting similar measures to protect consumers from the growing wave of crypto-related fraud.
What’s Next for Crypto ATMs?
North Dakota’s push to regulate crypto ATMs is just one part of a larger trend toward tightening controls around digital assets. As lawmakers balance consumer protection with the growth of the crypto industry, it’s likely we’ll see more states adopting similar measures in the coming years.
For now, the outcome of House Bill 1447 could set a precedent for how other states approach crypto ATM regulation, and whether crypto ATMs will become a more regulated space in the wider crypto landscape. It’s a reminder that while crypto technology continues to evolve, the need for robust consumer protections is just as important—if not more so—than ever before.
