California Bill proposed a Crypto ATM withdrawals regulation

Key Points:

• California proposes bill proposed a crypto ATM withdrawals regulation to protect consumers from fraud.
• Businesses objected to the crypto ATM withdrawals regulation, claiming it would hurt the sector and consumers.
• The bill is supported by victims of ATM scams, who believe the lower transaction limit will give them more time to detect fraud.

California legislators have proposed a bill called the “Digital Financial Asset Transaction Kiosks” Bill to adjust crypto ATM withdrawals regulation.

California Legislators Propose Bill to adjust Crypto ATM Withdrawals Regulation

A recent legislative investigation discovered that certain crypto ATMs are charging a premium as high as 33%. Additionally, a few ATMs have set limits of up to $50,000. The bill aims to combat scams in the crypto world. It sets a daily withdrawal limit of $1,000 for crypto ATMs and imposes a fee limitation of $5 or 15% of the transaction amount, starting in 2025. If approved, the bill will take effect on January 1, 2024.

The legislation was inspired by a visit to a crypto ATM in Sacramento, where lawmakers found high markups and fees ranging from 12% to 25%. They also discovered ATMs with daily withdrawal limits of up to $50,000. To address these issues, the bill aims to regulate premiums and withdrawal limits. California currently has over 3,200 Bitcoin ATMs.

California Bill Aims to Protect Consumers from Crypto ATM Scams

Monique Limón, a Democratic State Senator and co-author of the bill, emphasizes its goal of protecting individuals from fraud. The bill also requires digital financial asset businesses to obtain a license from the California Department of Financial Protection and Innovation by July 2025. Crypto ATMs have become hotspots for scams due to the use of cash transactions, which leave a faint digital trail. The bill is supported by victims of ATM scams, who believe the lower transaction limit will give them more time to detect fraud.

However, crypto ATM businesses argue that the bill will negatively impact smaller operators who rent ATM locations. They believe the legislation fails to address the root cause of fraud and instead targets a specific technology. They warn that this approach will harm the industry, consumers, and have limited impact on malicious actors.

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