The House Industry, Business and Labor Committee convened on January 22, 2025, to discuss House Bill 1447, which aims to regulate cryptocurrency kiosks in North Dakota. Representative Steve Swiatek introduced the bill, highlighting the growing presence of these kiosks, which resemble traditional bank ATMs but facilitate cryptocurrency transactions.

Swiatek noted that there are currently 48,000 cryptocurrency ATMs across the United States, with several located in North Dakota, particularly in Fargo. He expressed concern over a significant rise in fraud associated with these machines, citing that North Dakotans lost approximately $6 million to scams in 2023. Scammers often manipulate victims into withdrawing large sums of cash to deposit into these kiosks, which then transfer funds directly to the criminals.

One alarming case involved a victim who was coerced into withdrawing nearly $25,000 after being threatened by a scammer posing as a government official. Fortunately, a neighbor, who was a sheriff, intervened before the victim could complete the transaction.

The proposed legislation seeks to implement several protective measures, including licensing for cryptocurrency operators, daily transaction limits to mitigate fraud risk, and mandatory fraud warning notices at kiosks. Additionally, the bill would require operators to provide paper receipts for transactions, which would aid law enforcement in investigations. Operators would also be obligated to refund victims of fraudulent transactions.

During the meeting, committee members inquired about the prevalence and locations of these kiosks in North Dakota, with Swiatek confirming their visibility in various public spaces, including convenience stores and malls. The discussion also touched on the differences between traditional ATMs and cryptocurrency kiosks, particularly regarding transaction processes.

The committee's deliberations on House Bill 1447 reflect a proactive approach to addressing the challenges posed by the rise of cryptocurrency kiosks and the associated risks of fraud, aiming to enhance consumer protection in North Dakota. Further testimony from representatives of the Attorney General's office and the Department of Financial Institutions is expected as the bill progresses.