By: Eliza Bennet
In a bid to minimize scams, California is set to enact strict regulations on cryptocurrency ATM transactions. Starting from January 2024, a new law will limit cryptocurrency ATM transactions to $1,000 per person daily in the state. Additionally, the law stipulates that operators' fees from 2025 should not exceed $5 or 15% of the transaction, whichever is higher. This follows a legislative investigation that unearthed high premiums of up to 33% on some crypto assets compared to their prices on crypto exchanges.
Part of the law requires digital financial asset businesses to acquire a license from the California Department of Financial Protection and Innovation by July 2025. The stipulations outline that the law intends to promote transparency and restrict fraudulent activities, primarily involving digital financial asset transaction kiosks or cryptocurrency ATMs. This comes after legislative members found crypto ATM withdrawal limits as high as $50,000.
The law arises from growing concerns over the increasing incidences of fraud related to cryptocurrency ATMs. Victim testimonials indicate that the proposed low transaction limit could afford them enough time to discern potential scams. However, the move has sparked a debate with critics who argue that it penalizes technology rather than addressing issues at the heart of fraudulent behavior. They assert that hamstringing the industry might end up hurting consumers while doing little to curb illicit dealings.
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