header banner

In an effort to stop fraud, a California bill would limit daily cryptocurrency ATM withdrawals to $1K

Table of Contents

    A new legislative investigation found some crypto ATMs charging a premium as high as 33%, while a few ATMs had limits of up to $50,000.

    11011 Total views

    144 Total shares

    California bill aims to cap crypto ATM withdrawals at $1K per day to combat scams

    California legislators have proposed a new bill titled “Digital financial asset transaction kiosks,” calling for a cap on crypto ATM withdrawals of $1,000 per day in light of growing scams. Additionally, starting in 2025, the law would limit operators’ fees to $5 or 15% (whichever is higher). The bill, if approved, would come into effect on Jan. 1, 2024. 

    The bill was introduced after legislative members visited a crypto ATM in Sacramento and found markups as high as 33% on some crypto assets compared with their prices on crypto exchanges. On average, a crypto ATM charges fees between 12% and 25%, according to a legislative analysis. 

    Government officials also found ATMs with limits as high as $50,000, prompting them to take regulatory measures to curb such high premiums and withdrawal limits. There are more than 3,200 Bitcoin ATMs in California, according to Coin ATM Radar.

    Democratic State Senator Monique Limón, who co-authored the proposed legislation, said the “new bill is about ensuring that people who have been frauded in our communities don’t continue to watch our state step aside” when there are real issues happening.

    Another provision of the bill would require digital financial asset businesses to obtain a license from the California Department of Financial Protection and Innovation by July 2025

    Crypto ATMs are a popular way for people to exchange cash for their choice of cryptocurrency but have become a hub for scams and exploits because of the nature of transactions (i.e., hard cash). Unlike bank and wire transfers, each transaction leaves less of a trail.

    Related: CoinSmart president says crypto taxes are a ‘little bit more favorable’ outside US

    Some residents have recently been caught up in such scams, where the scammer persuades the victim to go to a nearby crypto ATM and deposit cash for the crypto of their choice. Some of those affected by ATM scams have lauded the bill and said the low transaction limit would give victims time to realize if they are being duped, reported the LA Times.

    On the other hand, crypto ATM businesses said the new bill would harm the small operators who must pay rent on their ATMs. The operators noted that the bill fails to address the core issue of the fraud and instead takes a punitive path focused on a specific technology. They warned such a move would shudder the industry and hurt consumers while doing nothing to stop bad actors.

    Magazine: Bitcoin is on a collision course with ‘Net Zero’ promises


    Article information

    Author: Rhonda Williams

    Last Updated: 1698630361

    Views: 761

    Rating: 4.5 / 5 (80 voted)

    Reviews: 86% of readers found this page helpful

    Author information

    Name: Rhonda Williams

    Birthday: 1926-06-27

    Address: 59283 Nicholson Lake, Annshire, MN 76118

    Phone: +3820085258609616

    Job: Marketing Manager

    Hobby: Sculpting, Drone Flying, Knitting, Skydiving, Whiskey Distilling, Wildlife Photography, Mountain Climbing

    Introduction: My name is Rhonda Williams, I am a resolved, radiant, expert, dazzling, accessible, exquisite, irreplaceable person who loves writing and wants to share my knowledge and understanding with you.