- Wynn Wellington and Avery Tays, Reporters, The Statehouse File
Hoosiers lost more than $125 million at cryptocurrency kiosks in 2024. Technology allows scams to run rampant—“particularly, they are on steroids because of cryptocurrency,” said Sergeant Nathan VanCleave of the Evansville Police Department, who spoke Tuesday at the House Financial Institutions Committee.
It met at the Statehouse to hear House Bill 1116, which aims to increase the regulation of these kiosks and specifically targets and prevent fraud.
Virtual currency kiosks, commonly known as Bitcoin ATMs, have been around for over 10 years and have grown in popularity. These kiosks offer an in-person way to buy and sell digital currency with cash, credit cards and debit cards. They can be found in many convenience stores, gas stations and grocery stores.
People can insert a card or cash into the machine, and their selected amount of money is transferred to a digital wallet as cryptocurrency. Someone may choose to use cryptocurrency as a way to invest their money, make secure online payments or hold their money outside a centralized bank.
Rep. Wendy McNamara, R-Evansville, speaks about HB 1116 in a House Financial Institutions Committee meeting on Tuesday. She authored the bill, which covers the regulation of virtual currency kiosks. Photo by Wynn Wellington, TheStatehouseFile.com.
Cryptocurrency kiosks provide an opportunity for money investment without the need for a bank account. But transactions are often irreversible, making it easier for scammers to take advantage of vulnerable populations.
“We are currently living in a scam-demic,” said VanCleave, who works in the Financial Crimes Unit and has specialized training and certificates in cryptocurrency and tracing cryptocurrency.
Scammers contact people in a variety of ways, such as through phone calls, text messages and emails, claiming that the victim must transfer money at a specified virtual currency kiosk and creating a false sense of urgency.
HB 1116, authored by Rep. Wendy McNamara, R-Evansville, aims to strengthen the protection of consumers when using virtual currency kiosks and focuses on scam prevention. The bill would provide additional regulations for kiosk operators, such as requiring them to be licensed in Indiana as money transmitters and imposing a daily $1,000 transaction limit and 3% fee cap.
Operators fall under federal regulation but have very little oversight by the state. Nine people, including two advocates from different kiosk companies, shared their support for the regulations outlined in the bill.
Clara Wulfsen, the associate director of government affairs for CoinFlip, testifies on HB 1116 on Tuesday. CoinFlip operates an extensive network of cryptocurrency kiosks around the world. Photo by Wynn Wellington, TheStatehouseFile.com.
Clara Wulfsen, associate director of government affairs for CoinFlip, said she agrees with 95% of the bill and believes state regulation is needed, but she called for amendments regarding transaction limits and fee caps.
The manager of governmental relations for Bitcoin Depot, Michael Geiselhart, also emphasized her concerns, stating that a 3% cap would be an “eviction notice” for kiosk companies.
Because the kiosks are privately owned, their upkeep incurs costs that regular ATMs do not have. The 3% cap would significantly decrease the profit margin for operators in Indiana, potentially forcing them to remove their machines.
Regardless of the disagreements around fee caps, the testifiers all agreed that some change is needed.
“We need something on a statewide level matching what 20 other states have already done,” said VanCleave.
Further discussion of the bill will take place in the committee next week.