Democrats in Wisconsin Submit Senate Accompaniment Bill to Restrict Cryptocurrency Kiosks
In response to a nationwide surge in cryptocurrency kiosk fraud that cost victims nearly $247 million in 2024, Wisconsin is considering two identical bills, Senate Bill 386 and Assembly Bill 384, to impose stricter regulations on these digital currency machines.
The key provisions in these proposals include:
- Money transmission licenses: Crypto kiosk operators must obtain these licenses under the Wisconsin Department of Financial Institutions’ Division of Banking.
- Know Your Customer (KYC) protocols: Users must undergo strict identity verification, including presenting photo ID and personal data collection before transacting.
- Transaction limits: A daily cap of $1,000 per customer is proposed to reduce risks of large fraudulent transactions.
- Fee caps: Transaction fees would be limited to 3% or $5, whichever is lower.
- Mandatory fraud warnings: Kiosks must prominently display “Fraud Alert” messages warning users about common scams.
- Refund policies: Victims of scams reported within 30 days would be entitled to refunds.
- Law enforcement tracking: The bills allow authorities to track money flows through crypto kiosks, similar to traditional banking, to combat money laundering and fraud.
These legislative efforts aim to control digital currency terminals scattered across gas stations and grocery stores statewide. The bills are currently awaiting committee review and reflect growing attention to regulating crypto kiosks at the state level, balancing fraud prevention with concerns about privacy and access to crypto services.
Wisconsin hosts 582 Bitcoin ATMs among 31,439 operating nationwide, according to Coin ATM Radar. If approved, customer identification requirements will take effect 60 days after passage.
Arjun Vijay, founder of crypto exchange Giottus, stated that crypto ATMs lack robust KYC protocols, making them susceptible to money laundering and illicit activities. Dileep Kumar H V, director at Digital South Trust, supported the measures, stating that customer identification requirements build public trust and pave the way for safer, more credible digital currency adoption.
The measures would force terminal operators into Wisconsin's money transmitter licensing system. This follows similar regulatory actions elsewhere, such as New York’s state-level KYC rules and Spokane’s crypto kiosk ban. In the U.S., Washington's Spokane city council voted to completely eliminate crypto kiosks following federal investigations into billions in fraud-related losses. Similar actions have been taken in other countries, such as Australia and New Zealand, which have implemented transaction limits and are preparing complete prohibitions.
The proposals also include consumer protections such as mandatory fraud alerts, identity verification protocols, and spending restrictions. Senator Kelda Roys and six colleagues have filed Senate Bill 386, which mirrors Assembly Bill 384 introduced by Rep. Ryan Spaude. If passed, these bills could set a precedent for stricter regulations on cryptocurrency kiosks across the United States.
- Wisconsin's Senate Bill 386 and Assembly Bill 384, aiming to combat crypto kiosk fraud, require operators to obtain money transmission licenses under the Wisconsin Department of Financial Institutions’ Division of Banking.
- Strict Know Your Customer (KYC) protocols are proposed in these bills, making users verify their identity by presenting photo ID and personal data before transacting.
- Included in the proposals is a daily transaction limit of $1,000 per customer, intended to minimize risks of fraudulent transactions.
- transaction fees would be capped at 3% or $5, whichever is lower, according to the bills under consideration.
- Arjun Vijay, founder of crypto exchange Giottus, has expressed concerns about money laundering and illicit activities due to inadequate KYC protocols in crypto ATMs.
