FRANKFORT, Ky.—Kentucky lawmakers are moving to tighten oversight of cryptocurrency kiosks amid growing concerns about scams that use the machines to extract money from consumers.
House Bill 380 would establish new rules for businesses that operate virtual currency or cryptocurrency kiosks across the state, adding transaction limits and identification requirements designed to make it harder for criminals to exploit the machines, Spectrum News1 said.
The legislation would cap daily kiosk transactions at $2,000 and create a waiting period for first-time users converting cash into digital assets such as bitcoin. It would also require that each kiosk transaction be identifiable, a step lawmakers say would make it easier for law enforcement to trace funds involved in fraudulent schemes.
The bill advanced unanimously out of committee Wednesday after lawmakers heard testimony about how scammers increasingly direct victims—often seniors—to deposit cash into cryptocurrency machines, Spectrum News1 said.
Consumer Harold Miller of Danville told lawmakers he was nearly targeted in such a scheme when a caller posing as a law enforcement official demanded thousands of dollars to resolve a supposed legal issue. Miller said he suspected a scam and contacted authorities instead of following instructions to deposit funds into a crypto kiosk.
Law enforcement officials told lawmakers that similar scams have led to significant losses, including cases in which large sums transferred through cryptocurrency machines became difficult or impossible to recover.
Supporters of HB 380 said the proposal aims to strike a balance between allowing legitimate digital-asset transactions while creating safeguards for consumers unfamiliar with cryptocurrency.
The measure now moves forward in the legislative process as lawmakers continue to examine how to address fraud tied to rapidly expanding digital-asset payment channels.