By Emma Kinery | State Affairs
Arizona’s new law regulating bitcoin ATMs has taken effect, making it the latest state to place new restrictions on virtual currency kiosks in an effort to cut down on predatory scams.
Ten states this year have enacted laws to regulate the machines. Lawmakers in several others, most recently Wisconsin, have introduced legislation to do so.
Bitcoin ATMs, BTMs, cryptocurrency ATMs, or virtual currency kiosks allow customers to convert cash into cryptocurrency and deposit it in a digital wallet. Scammers increasingly are using the machines to facilitate schemes to trick people, especially elderly individuals, into sending bitcoin.
Scammers will often pose as either customer service representatives from banks or tech companies, love interests, or law enforcement officers and pressure victims into depositing money into a virtual currency kiosk. It then converts the cash into cryptocurrency and wires the funds to a digital wallet. The money can then be wired to wallets abroad, making it difficult for law enforcement to trace or recoup.
Arizona House Bill 2387 included provisions to limit daily transactions to $2,000 a day for new customers and $10,500 for existing customers. It mandated warnings to be displayed on kiosk screens alerting users to common fraud tactics, a requirement that the user acknowledge the warnings before proceeding, and for machines to provide transaction receipts, which can be essential to tracing transactions and proving fraud.
