North Dakota’s Crackdown on Crypto ATMs: A Game-Changer or Just More Red Tape?

The North Dakota Senate just made a bold move in the world of cryptocurrency. On March 18, lawmakers overwhelmingly passed House Bill 1447 in a staggering 45-to-1 vote, setting the stage for stricter regulations on crypto ATMs across the state. But is this a necessary safeguard, or just another hurdle for the crypto industry?

The bill, initially introduced in January, was crafted to curb the rising tide of crypto scams. If signed into law, it will enforce a $2,000 daily transaction limit on all cryptocurrency ATMs and require operators to obtain money transmitter licenses. Additionally, these kiosks will be mandated to display fraud warnings, use blockchain analytics to flag suspicious activity, and submit quarterly reports on their operations.

A Necessary Move or Overreach?

North Dakota lawmakers argue that this bill is crucial in the fight against crypto-related fraud. The numbers speak for themselves: in 2023 alone, residents reported 103 crypto scam complaints to the FBI, with financial losses totaling a staggering $6.5 million. House Representative Steve Swiontek, the bill’s sponsor, insists that unregulated ATMs have become a haven for scammers, preying on unsuspecting users who lack the technical know-how to spot fraudulent transactions.

However, the bill didn’t pass without adjustments. Initially, the proposal set the daily cap at $1,000, but lawmakers later revised it to $2,000 for the first five transactions within 30 days. Now, after the Senate’s latest revisions, the final rule stands at a simple $2,000 per day limit, streamlining its enforcement.

Crypto Industry Braces for Impact

While proponents of the bill argue that it enhances consumer protection, critics fear it may stifle crypto adoption and innovation. The restrictions could deter ATM operators from expanding in North Dakota, limiting accessibility for residents who rely on these kiosks for digital transactions. The state currently hosts dozens of crypto ATMs, part of the nearly 30,000 machines operating across the U.S.

The move follows a broader trend of tightening crypto regulations. Just last week, Nebraska Governor Jim Pillen signed a similar bill into law, known as the Controllable Electronic Record Fraud Prevention Act. This new legislation enforces stringent licensing and reporting requirements on crypto ATM operators in a bid to curb fraud.

What’s Next?

Before House Bill 1447 becomes law, it must return to the House for approval of the Senate’s amendments. If it clears that hurdle, the final decision will rest with Governor Kelly Armstrong. Given the overwhelming support in the Senate, the bill’s passage seems almost inevitable.

For crypto users in North Dakota, this could be a turning point. While the new regulations may offer a layer of security, they also raise questions about how much government intervention is too much. Will these measures truly protect consumers, or will they end up discouraging the growth of digital assets in the state? Only time will tell.