Bill would provide refund for fraud using cryptocurrency ATMs
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NEBRASKA CITY -A Nebraska state senator has introduced a bill that would give victims of gift card or cryptocurrency fraud a pathway for a full refund.
Nebraska State Sen. Eliot Bostar introduced LB 609, which is supported by the AARP, Nebraska’s Consumer Protections Deputy with the Attorney General’s Office, Lincoln police and Nebraska Sheriff’s Association.
The American Association of Retired Persons is calling for protections related to the purchase of gift cards and sudden use of cyptocurrency kiosks, or digital currency ATMs.
The advocacy non-profit for people over age 50 says state licenses, daily transaction limits and fraud warnings will help safeguard older Americans from scammers.
The AARP says the FBI received 5,500 complaints in 2023 involving cryptocurrency kiosks with reported losses over $189 million.
If passed, compliance officers would be required to refund any new customer that is victim to fraud.
Kiosk operators would also have to provide warnings:
- CONSUMER FRAUD OFTEN STARTS WITH CONTACT FROM A STRANGER 4 WHO IS INITIATING A DISHONEST SCHEME.
- IF YOU BELIEVE YOU ARE BEING SCAMMED, CALL YOUR LOCAL LAW ENFORCEMENT AGENCY
- Electronic records are not legal tender and are not backed or issued by the U.S. government
- The value of controllable electronic records is derived form supply and demand in the global marketplace which can rise or fall independently of any fiat currency
- A person accepts a controllable electronic record as payment today is not required to accept such a payment in the future
Kiosk operators shall use blockchain software to assist in the prevention of sending purchased controllable electronic records from an operator to an electronic wallet know to be affiliated with fraudulent activity.
Kiosk operators will designate a compliance officer, who will issue a refund to new customers who are victims of fraud.
There are 85 Bitcoin kiosks in Nebraska, including locations in Nebraska City, Beatrice, Bellevue and Lincoln.
During a House Financial Services Committee hearing in December, Rep. Mike Flood of Nebraska called for banking regulations at both a federal and state level.
Flood: “Regulators don’t have the human capital to keep up with the pace of innovation. We need regulators to be good. We need them to be capable of protecting consumers but also allowing innovation.”
He called for “stable coin” legislation that would mean that if a consumer has a Stablecoin at $1, the issuer must have $1 in reserve.
https://flood.house.gov/media/press-releases/congressman-flood-stablecoins-legislation-crossroads-banking-policy