California Takes Action Against Crypto Scams
California is addressing the growing concern of crypto scams by introducing a new bill aimed at regulating crypto-powered automated teller machines (ATMs). The proposed bill, known as the “Digital Financial Asset Transaction Kiosks” bill, seeks to limit the maximum cash withdrawal from these ATMs to $1,000 per individual. The goal of this legislation is to protect investors from scams and potential violence associated with crypto ATMs.
Curbing Illicit Activities
Currently, there are over 3,200 crypto ATMs operating in the United States, with some allowing daily transactions of up to $50,000. However, these high limits have made these machines attractive tools for illicit activities. The California legislative body conducted an investigation and found that many crypto scams were facilitated through these ATMs. The new bill aims to curb such activities and enhance security measures.
Limits on Charges
The bill also addresses the charges imposed by crypto ATM operators. It sets a maximum fee of $5 or 15% of the transaction amount (whichever is higher) at the time of the transaction. This measure aims to prevent excessive fees that some operators currently impose. State legislators discovered markups of 33% on certain digital assets compared to their prices on cryptocurrency exchanges during their visit to a Sacramento crypto ATM.
Ratification and Transition Period
The proposed legislation is scheduled for full enactment on or before January 1, 2024. Crypto ATM operators will be required to make the necessary changes by 2025, allowing for a 12-month transition period for virtual asset service providers (VASPs). Additionally, all crypto ATM operators must obtain a license with the Department of Financial Protection and Innovation by July 1, 2025.
Hot Take: Protecting Investors and Enhancing Security
The introduction of the Digital Financial Asset Transaction Kiosks bill in California reflects the state’s commitment to protecting investors and combating crypto scams. By limiting cash withdrawals from crypto ATMs and imposing restrictions on charges, the legislation aims to prevent illicit activities and provide greater security for users. These measures, coupled with the requirement for licensing and transaction receipts, demonstrate California’s determination to address the real issues surrounding crypto ATM scams. As the bill progresses towards ratification, it sets a precedent for other states to take similar actions in safeguarding their residents from fraudulent practices in the crypto space.
By
By
By
By
