North Dakota Moves to Regulate Crypto ATMs Amid Rising Fraud Concerns

North Dakota is on the verge of introducing a licensing framework for crypto ATMs after its Senate passed House Bill 1447, a measure aimed at curbing fraud and ensuring consumer protection. The bill, first introduced on Jan. 15, mandates that crypto ATM operators obtain money transmitter licenses, display on-screen fraud warnings, use blockchain analytics tools to detect illicit transactions, and submit quarterly reports on kiosk locations and activity. Additionally, operators must appoint a compliance officer to oversee adherence to the new regulations.

The move follows growing concerns over crypto ATMs being exploited for scams and money laundering. A TRM Labs report revealed that these kiosks have processed at least $160 million in illicit transactions since 2019. The U.S. Federal Trade Commission (FTC) also reported a nearly tenfold increase in Bitcoin ATM-related scam losses since 2020.

Regulatory crackdowns on crypto ATMs are intensifying worldwide. In the UK, the Financial Conduct Authority (FCA) has been taking action against unregistered operators. In 2024, the FCA prosecuted Olumide Osunkoya for illegally running crypto ATMs that processed $3.4 million, leading to a four-year prison sentence.

Despite Bitcoin’s price growth in 2024, the number of crypto ATMs in the U.S. has remained stagnant since 2022, according to CoinATMRadar. With heightened scrutiny and rising fraud cases, regulators are tightening oversight, signaling a shift toward stricter compliance measures for crypto ATM operators.