Strengthening Bitcoin ATM Regulations to Combat Fraudulent Activities

California Imposes Daily Cap on Digital Asset Kiosk Transactions

California is taking decisive action to combat fraudulent activities involving digital asset kiosks. Starting January 2026, a new law signed by the state governor will restrict daily transactions at these kiosks to $1,000 per person.

Regulatory Framework for Digital Asset Companies

This move is part of a broader initiative to implement a comprehensive regulatory framework for digital asset companies by 2025. The Digital Financial Assets Act, recently approved by the governor, will require these companies to obtain state licenses and adhere to strict auditing and recordkeeping standards.

Protecting Consumers from Scams

The restrictions on digital asset kiosks aim to provide potential scam victims more time to recognize fraudulent activities before transferring large sums into hard-to-trace digital assets. A recent case in San Jose, where an individual was deceived into depositing $15,000 into a kiosk, highlights the need for such measures.

Industry Perspectives and Consumer Protection

While some industry advocates argue that the law could negatively impact consumers, consumer protection groups assert its necessity in combating the growing fraud associated with these kiosks. According to federal data, over 46,000 individuals lost more than $1 billion to digital asset-related scams last year.

California's Digital Asset Kiosk Landscape

Currently, California hosts more than 3,200 digital asset kiosks, underscoring the importance of regulatory oversight in this rapidly growing sector.

Key Provisions of Assembly Bill 39

The new legislation, Assembly Bill 39, introduces several key provisions to enhance oversight and transparency across California. These include a $1,000 daily transaction limit per person, a fee cap of $5 or 15% of the transaction amount (whichever is greater), and comprehensive disclosure requirements covering terms, conditions, amounts, fees, and price differences. Operators must provide detailed transaction receipts showing the licensed exchange used, maintain and update lists of kiosk locations, and comply with state licensing requirements by July 1, 2025.

Implementation Timeline

The legislation is set to take effect only if a broader digital asset regulatory bill, AB 39, is enacted by January 1, 2024. This approach ensures a comprehensive and coordinated regulatory framework for the digital asset industry in California.