As crypto scams continue to surge across the United States, South Dakota is reportedly taking a strategic approach to protect the community. While a growing number of attacks have been reported targeting on crypto ATMs, the lawmakers are moving to regulate them.
Many incidents have been recorded recently where fraudsters trick victims into sending funds quickly and irretrievably to crypto ATMs. In an attempt to tackle these growing scams, South Dakota is introducing new safeguards, instead of banning or restricting the use of crypto ATMs. Senate Bill 98, a crypto bill expected to take effect in 2026, aims to curb scams tied to crypto kiosks while keeping trading and ownership unaffected.
Why South Dakota is Focusing on Crypto ATMs?
According to Keloland News, South Dakota is introducing Senate Bill 98 to tackle the rising crypto ATM scams, leaving the wider crypto market untouched. The goal of this approach is to protect users, while not limiting their access to cryptocurrencies.
Reportedly, Republican Senator Steve Kolbeck stated that the bill, expected to come into force this year, is aimed at protecting consumers from scams involving crypto ATMs. Being one of the main sponsors of the Senate Bill 98, Kolbeck asserted that the bill does not impede the basic rights of a crypto trader. He noted, “If you want to buy, sell, or trade cryptocurrency, that is not what it is.” Adding more about the bill’s aim, he stated,
“There are some bad players out there,” he said. “We want to make sure that we put some bumpers around this before people start stuffing cash into these machines.”
Other supporters of the bill include Senator Carl Perry and Glen Vilhauer. With the backing from these lawmakers, the Senate bill 98 aims to reduce losses from crypto ATM scams. But it will not impact the legal buying, selling, and use of digital assets. According to Kolbeck, the bill is a response to the growing number of scams. Victims are often tricked into sending assets into the kiosks, where fraudsters pretend to be government officials, law enforcement, or banks.
On Janaury 6, South Dakota Attorney General Marty Jackley unveiled a list of proposed laws, especially focusing on crypto threats. One of the legislations gives the authority the complete power to seize cryptocurrency during criminal investigations. This highlights the prominent role of cryptocurrencies in crime, underscoring the need for stringent regulations.
Why Crypto Kiosks are Risky?
According to lawmakers, crypto ATMs are often targeted by fraudsters because once money is sent, it is nearly impossible for the victims to retrieve it. The victims have only a few options to recover their funds.
Unlike regular ATMs that handle only cash, crypto kiosks allow people to buy or sell digital assets like Bitcoin. This makes it difficult for the investors to get back their funds once lost. It also makes crypto ATMs one of the easiest targets for scammers.
According to reports, South Dakota has seen a significant hike in crypto kiosk scams. The Attorney General’s Office stated that the US State has seen a loss of $13.8 million in scams linked to crypto ATMs in 2024 alone.
