California Legislators Propose Bill to Regulate Crypto ATM Withdrawals
California legislators have put forward a new bill called “Digital financial asset transaction kiosks” that aims to address the growing issue of scams associated with crypto ATMs. The proposed legislation would enforce a daily withdrawal limit of $1,000 for crypto ATMs and restrict operators’ fees to $5 or 15% (whichever is higher) starting from 2025. If approved, the bill would take effect on January 1, 2024.
The introduction of this bill was prompted by lawmakers’ visit to a crypto ATM in Sacramento, where they discovered markups as high as 33% compared to crypto exchange prices. On average, crypto ATMs charge fees ranging from 12% to 25%. Additionally, some ATMs had withdrawal limits as high as $50,000.
Regulating High Premiums and Withdrawal Limits
With over 3,200 Bitcoin ATMs in California, government officials are concerned about the excessive premiums and withdrawal limits associated with these machines. To address these issues, regulatory measures are being taken.
The proposed legislation also includes a provision that requires digital financial asset businesses to obtain a license from the California Department of Financial Protection and Innovation by July 2025.
Aiming to Protect Consumers from Scams
The bill’s co-author, Democratic State Senator Monique Limón, emphasized the importance of protecting individuals who have fallen victim to fraud in the community. She stated that the goal is to prevent the state from turning a blind eye to real issues.
Crypto ATMs provide a popular method for people to exchange cash for cryptocurrencies. However, due to the use of hard cash in these transactions and the lack of traceability compared to bank and wire transfers, they have become a target for scams and exploits.
Hot Take: California Proposes Regulation to Safeguard Crypto ATM Users
California legislators have introduced a bill to regulate crypto ATMs in order to combat scams and protect consumers. The proposed legislation includes a daily withdrawal limit of $1,000 and caps operators’ fees at $5 or 15%. With over 3,200 Bitcoin ATMs in the state, excessive premiums and withdrawal limits have become a concern for government officials. The bill also requires digital financial asset businesses to obtain a license by 2025. By implementing these regulations, California aims to address the real issues faced by individuals who have been defrauded in the community.
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