California Proposes Crypto ATM Regulations

New Legislation on Crypto ATMs

California legislators have introduced a bill titled "Digital financial asset transaction kiosks" to regulate cryptocurrency ATM transactions. The proposed legislation seeks to cap daily withdrawals at $1,000, a measure aimed at reducing the risk of scams associated with these transactions.

Fee Limitations for Operators

Starting in 2025, the bill also plans to impose limits on the fees that operators can charge. The legislation specifies that fees should not exceed $5 or 15% of the transaction amount, whichever is higher. This comes in response to findings that crypto ATMs often charge significantly higher fees compared to standard crypto exchanges.

Implementation Timeline

If passed, the bill is scheduled to come into effect on January 1, 2024. This timeline gives operators and users time to adapt to the new regulations. The legislation was motivated by a visit to a crypto ATM in Sacramento, where legislators observed markups as high as 33% above exchange rates.

Addressing High Transaction Costs

The legislative analysis revealed that crypto ATM fees generally range between 12% and 25%. By capping fees, the bill aims to make these financial services more affordable and transparent for consumers. The new regulations are part of broader efforts to foster a safer and more equitable financial environment in the growing digital asset market.

By focusing on these key areas, California hopes to mitigate fraudulent activities and protect consumers while ensuring fair pricing in the rapidly evolving crypto landscape.