Oct 23, 2023

Combatting Crypto Scams: California Caps ATM Withdrawals at $1,000 Per Day

California bill to cap crypto ATM withdrawals to $1,000 per day to combat crypto scams.
California bill aims to cap crypto ATM withdrawals at $1,000 per day to combat scams

Crypto ATMs in California

California legislators have proposed a new bill titled “Digital financial asset transaction kiosks” to address the growing number of scams and to impose a cap on crypto ATM withdrawals of $1,000 per day. Moreover, starting from 2025, the law would limit operators’ fees to $5 or 15% (whichever is higher). If approved, the bill would come into effect on January 1, 2024.

This bill was introduced after legislators visited a crypto ATM in Sacramento and discovered markups as high as 33% on some crypto assets compared to their prices on crypto exchanges. On average, a crypto ATM charges 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. According to Coin ATM Radar, there are more than 3,200 Bitcoin (BTC) ATMs in California.

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 related to Celcius Crypto, Dot Crypto, Bone Crypto, Crypto App, Crypto Stock, Crypto Currency Today, Crypto Death, and Casper Crypto.

Crypto ATMs and the California Department of Financial Protection and Innovation

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 due to the lack of a paper trail. Recently, some residents have fallen victim to crypto ATM scams, where the scammer has persuaded them to deposit cash for the crypto of their choice. In response, the California Department of Financial Protection and Innovation has proposed a bill that would require digital financial asset businesses to obtain a license by July 2025, and would limit transactions to a low amount.

The victims of the ATM scam have praised the move, saying the low transaction limit will give them time to realize if they are being duped. However, crypto ATM businesses have argued that the bill fails to address the core issue of the fraud and instead takes a punitive path focused on a specific technology. They fear that the bill will shutter the industry and hurt consumers, while doing nothing to stop bad actors.

Casper Crypto, Celcius Crypto, Bone Crypto, D2T Crypto, and other crypto apps and stocks are all affected by the bill, as the cryptocurrency industry continues to evolve in the era of Web 3.0.

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