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On March 12, the Republican governor of Nebraska, Jim Pillen, signed legislation to protect against digital asset fraud, particularly in relation to digital asset ATMs.
The bill, titled LB 609, was introduced on January 22 by Nebraska State Senator Eliot Bostar. The bipartisan and “law-enforcement-supported” legislation establishes the ‘Controllable Electronic Record Fraud Prevention Act’ to help combat fraud and protect users of digital asset kiosks and ATMs.
“Cryptocurrency is an important, emerging industry — and we’ve been working hard to build Nebraska into a cryptocurrency leader,” said Governor Pillen. “An important part of these efforts is to make sure that we have guardrails to prevent criminals from taking advantage of Nebraskans.”
He added that, “We look forward to continuing to lay the groundwork for a safe and robust crypto industry in our state.”
As of March 13, the United States hosted 29,795 digital asset ATMs, which represents 79% of all machines worldwide; currently, 37,719 digital asset ATMs are active globally.
According to the Federal Trade Commission (FTC)—the U.S. agency tasked with enforcing civil antitrust law and promoting consumer protection—victims in the country lost over $65 million to digital asset ATM fraud in the first half of 2024 alone.
“Fraud losses at BTMs (Bitcoin ATMs) are skyrocketing, increasing nearly tenfold from 2020 to 2023,” said the FTC in September 2024.
To combat this, Nebraska’s new legislation stipulates that digital asset ATM and kiosk operators must be licensed under the state’s Money Transmitters Act and registered and approved by the Department of Banking and Finance. In addition, operators must provide quarterly reports on kiosk locations, names and transaction data.
The Act also implements transaction limits of $2,000 per day for new users and $5,000 per day for existing customers, with fees not permitted to exceed 18% of the transaction value. New customers who report fraud within 90 days can receive a full refund, including fees while existing customers can be refunded for the fees associated with fraudulent transactions.
The bill also states that Kiosk operators must display fraud warnings and appoint a compliance officer to enforce fraud prevention measures.
“Nebraska is open for business in the cryptocurrency space,” said Nebraska Department of Banking Director Kelly Lammers. “Of course, those that target our citizens, that look to exploit Nebraskans and their financial resources, using Crypto ATMs as part of their transfer method, we will soon have a team that will be watching even more closely.”
The U.S. digital asset ATM network shrunk by more than 1,200 machines during the first weekend of March after Senator Dick Durbin (D-IL) introduced similar legislation, but on a federal level.
Federal ATM bill
On February 25, Democrat Senator Dick Durbin, who formerly chaired the Illinois Senate Judiciary Committee, proposed legislation to reduce fraud at digital asset ATMs across the country.
Speaking from the Senate floor, Durbin recounted the story of one of his Illinois constituents who had been scammed by someone claiming authorities had issued a warrant for his arrest. The fraudster claimed the man could “pay the fine” through a $15,000 deposit at a digital asset ATM to avoid jail.
The Illinois Senator said the scam indicated an “alarming trend of crypto ATM fraud.” As such, he was introducing the ‘Crypto ATM Fraud Prevention Act’ to provide “common sense guardrails” against fraud of this type.
“This bill will require crypto ATM operators to warn consumers about scams and take reasonable steps to prevent fraud at their machines,” said Durbin. “It will also put in place measures to limit the amount that consumers lose when they do fall victim to scams, give law enforcement new tools to track down and fight back against criminals.”
The legislation would require digital asset ATM operators to provide clear warnings to consumers about the risk of fraud, including warnings of common types of scams and the fact that consumers should never send money to someone they have never met.
ATM operators would be required to appoint a chief compliance officer and develop a comprehensive anti-fraud policy, to be submitted to the Financial Crimes Enforcement Network—a bureau within the U.S. Department of the Treasury that collects and analyzes information about financial transactions to money laundering, terrorist financing, and other financial crimes.
Operators must also provide live customer support during all operating hours.
New customers—who were identified as “most likely to be victims of fraud” and defined as those “within 14 days of their first transaction”—would be afforded additional protections, including transaction limits of $2,000 per day and $10,000 total over the first 14 days, full refunds for fraudulent transactions if the customer makes a report within 30 days. They would require live, verbal confirmation for any transaction greater than $500.
To help law enforcement, the legislation also proposed the requirement for digital asset ATM operators to register and disclose ATM locations, as well as a requirement for “sufficient” receipts and information to trace transactions.
Durbin said criminals were using digital asset ATMs “to cheat Americans out of their hard-earned savings to the tune of $114 million in 2023 alone.” He added that “most of the victims are senior citizens.”
The proposed legislation builds on the Illinois Democrat’s previous work to crack down on digital asset scams. In September 2024, Durbin led a group of Senate Democrats in pressing the ten largest BTC ATM operators to curb fraud against elderly Americans.
The ‘Crypto ATM Fraud Prevention Act’ will need to go through the standard legislative committee review process, after which—if approved—it will go to the Senate for a full vote, the House, and then to President Trump for final approval.
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