Georgia lawmakers crack down on Bitcoin ATM scams

ATLANTA, Ga. (Atlanta News First) - Georgia lawmakers have passed a bill aimed at cracking down on scams that have involved bitcoin ATMs, also known as virtual currency kiosks.

House Bill 945 would impose new rules on kiosk operators, including required warnings to customers; limits on how much money can be sent in a day; and new refund requirements for some victims who were deceived into buying cryptocurrency.

The bill defines a virtual currency kiosk, as an electronic terminal used to exchange cash for virtual currency, virtual currency for cash or to transmit virtual currency. The bill also defines “new customers” as people who have been registered with an operator for less than 72 hours; and “existing customers” as those registered for more than 72 hours.

Under HB 945, operators would have to give customers clear disclosures before transactions, including this warning, prominently displayed:

“WARNING: LOSSES DUE TO FRAUDULENT OR ACCIDENTAL TRANSACTIONS MAY NOT BE RECOVERABLE, AND TRANSACTIONS IN VIRTUAL CURRENCY ARE IRREVERSIBLE.”

The bill also sets a cap on the total amount of fees, commissions, spread or other charges related to a kiosk transaction: 18% of the amount of cash exchanged or transmitted.

The bill sets an aggregated maximum daily transaction limit of $2,500 for each new customer; and $10,000 for each existing customer. It also creates a refund requirement for some victims who were deceived into using a virtual currency kiosk.

For new customers, HB 945 requires an operator to issue a refund for the full amount of transactions made during the first 72 hours after registration, if the customer:

• was defrauded, fraudulently induced or otherwise deceived into making the transaction, and
• contacts the operator and a government or law enforcement agency within five days of the last transaction during that 72-hour period.

If those conditions are met, the operator must issue the refund within 72 hours of the request. The bill also requires operators to provide receipts with detailed information about each transaction.

Separately, the bill creates a process that allows a bank or credit union to place a temporary hold on a transaction if it has reasonable cause to suspect it may involve financial exploitation of an “eligible adult.” The bill defines an eligible adult as someone who is 65 or older or a disabled adult.

Under HB 945, a hold would expire after 15 business days, but a financial institution could extend it for up to an additional 15 business days if its review continues to support a reasonable belief of exploitation.

If Gov. Brian Kemp signs HB 945 into law, the kiosk rules would apply to operators across Georgia.

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