LINCOLN, Neb.— As cryptocurrency kiosks pop up in gas stations, malls, and convenience stores across the country, Nebraska is taking bold legislative steps to protect residents from a growing wave of fraud.
On the heels of a dramatic spike in consumer losses tied to crypto ATM scams, the Nebraska Legislature passed, and Governor Jim Pillen signed into law, the Controllable Electronic Record Fraud Prevention Act (LB 609). The bipartisan bill, scheduled to take effect September 2, 2025, arms regulators and law enforcement with powerful new tools to rein in crypto-related theft.
With nearly 200 crypto ATMs now operating in Nebraska, officials say the law is a timely and necessary response to escalating abuse of these kiosks by scammers targeting unsuspecting users, many of them first-time crypto buyers.
A Rising Threat Across the U.S.
Nationwide, the rise in scams using cryptocurrency ATMs has been swift and alarming. According to the Federal Trade Commission, consumer losses related to these machines jumped nearly tenfold between 2020 and 2023 and topped $65 million in just the first half of 2024.
Older adults are often targeted, but victims span all age groups. As of early 2024, the median loss per scam was an eye-popping $10,000.
How the Scams Work
The schemes typically begin with a simple message, a text from a wrong number, a social media connection, or a job ad. Sometimes scammers pose as government agents or tech support, spinning urgent tales about legal trouble or investment windfalls. In more calculated efforts known as “pig butchering,” scammers build trust over time, slowly grooming their victims.
Once trust is established, the fraudster urges the victim to deposit cash or, in some cases, provide gift card or credit card details into a crypto ATM, with the promise of securing or growing their money. Once the funds are sent, they vanish into the hands of the scammer, with little chance of recovery.
New Law Brings Real Reform
LB 609 introduces a sweeping set of protections aimed at both deterring scammers and safeguarding consumers. Under the law, crypto ATM operators must now be licenced in Nebraska, ensuring only vetted businesses can operate these machines.
To minimise damage from potential scams, the law institutes daily transaction limits, requires prominent scam warnings, and mandates that transaction receipts be provided to help trace criminal activity.
Crucially, the law provides refund protections. New users of crypto ATMs are entitled to full refunds for any fraudulent transactions, provided they report the incident within 30 days. Returning users may also be eligible for refunds of transaction fees.
ATM operators are required to provide live support, including a way for users to contact law enforcement directly if they suspect fraud.
A unique component of the legislation is its public education mandate. All machines must display a clear warning that fraud often begins with unsolicited messages from strangers and that these scams can come disguised as job offers, account alerts, or urgent demands from seemingly trusted entities.
State Aims to Balance Innovation and Security
As Nebraska positions itself as a forward-thinking player in the growing digital asset economy, officials say the new law represents a vital step towards ensuring innovation doesn’t come at the cost of public safety.
“Digital assets are part of an important, emerging industry, and Nebraska is proud to be a leader in this area,” state officials emphasised. “At the same time, our state is committed to fighting financial fraud. Under this law, the Nebraska Department of Banking and Finance will serve on the front line of consumer protection.”
Residents who believe they may be victims of a financial scam are encouraged to contact the NDBF at (402) 471-2171 or file a complaint online immediately.
A National Model?
With federal authorities tracking rising crypto-related fraud, Nebraska’s new legislation could serve as a template for other states. By mandating accountability and consumer support from ATM operators, the law shifts part of the burden away from victims and towards prevention and enforcement.
As crypto adoption grows and scam tactics become more sophisticated, experts say laws like LB 609 will be key to keeping emerging financial technologies secure and trustworthy for all Americans.
