Governor Jim Pillen has signed LB609 into law, introducing new consumer protections against cryptocurrency-related fraud. The bipartisan legislation, officially titled the Controllable Electronic Record Fraud Prevention Act, aims to crack down on scams involving cryptocurrency kiosks and ATMs across Nebraska.

Governor Pillen emphasized that while Nebraska is committed to fostering a strong cryptocurrency industry, safeguards must be in place to prevent financial crimes. “Cryptocurrency is an important, emerging industry — and we’ve been working hard to build Nebraska into a cryptocurrency leader,” Pillen stated. “An important part of these efforts is to make sure that we have guardrails to prevent criminals from taking advantage of Nebraskans.”

The bill introduces additional oversight on crypto ATMs, a growing target for fraudulent schemes. Nebraska Department of Banking Director Kelly Lammers underscored the need for increased transparency in the state’s crypto sector. “Nebraska is open for business in the cryptocurrency space,” Lammers said. 

“That also means we need to increase transparency to assure those doing legal business in the State of Nebraska that you are absolutely welcome. Of course, those that target our citizens, that look to exploit Nebraskans and their financial resources, using Crypto ATMs as part of their transfer method, we will soon have a team that will be watching even more closely.”‍

Rising Crypto Fraud Cases Prompt Legislative Action

Nebraska’s move to regulate cryptocurrency ATMs aligns with national efforts to address rising crypto-related fraud. 

The Federal Bureau of Investigation (FBI) reported that in 2023, cryptocurrency-related investment fraud resulted in losses totaling $3.9 billion, accounting for almost 71% of all cryptocurrency-related losses that year.

The report highlights that crypto ATMs are commonly used in scams involving impersonation fraud, investment schemes, and money laundering. The Federal Bureau of Investigation (FBI) has also warned about the use of cryptocurrency ATMs in scams, particularly those targeting elderly citizens through fraudulent tech support calls and romance scams.

In Nebraska, law enforcement agencies have reported an increase in cases where victims are directed to crypto ATMs to transfer funds under false pretenses. The new law grants state regulators more authority to oversee these transactions, investigate suspicious activity, and implement safeguards to prevent illicit use.

LB609 is expected to introduce new compliance requirements for cryptocurrency ATM operators, including enhanced customer verification measures and increased reporting obligations for suspicious transactions. 

Read more: FBI reports over $5.6B in losses from cryptocurrency fraud in 2023