Nebraska enforces new crypto ATM law to prevent fraud, requiring sufficient warning disclosures

Nebraska Governor Jim Pillen has signed the LB609 bill into law in an effort to combat fraud and "protect users of cryptocurrency kiosks and ATMs."

In a statement released Wednesday, the governor said the bipartisan legislation, known as the "Controllable Electronic Record Fraud Prevention Act," is part of the efforts to "make sure that we have guardrails to prevent criminals from taking advantage of Nebraskans."

The bill, introduced by Senator Eliot Bostar in January, stipulates that kiosk operators must be licensed under the Nebraska Money Transmitters Act and clearly disclose all terms associated with their services, including warnings about consumer fraud.

"Cryptocurrency is an emerging industry, and we’ve been working hard to build Nebraska into a crypto leader." said Pillen in a post on X. "We want everyone to know that we’re open for business — and that we’re doing it the right way."

Nebraska Department of Banking Director Kelly Lammers also noted that Nebraska is "open for business" in the cryptocurrency space. "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," Lammers said.

Regulatory bodies have closely monitored crypto ATMs due to concerns about their involvement in scams over the years. Late last month, Senator Dick Durbin also introduced the Crypto ATM Fraud Prevention Act, aiming at reducing fraud related to crypto ATMs. 

The Federal Trade Commission pointed out in a September report that there has been a "massive increase" in consumer losses due to scams involving Bitcoin ATMs. The FTC said that fraud losses to Bitcoin ATMs topped $65 million in the first half of 2024.