Nebraska Lawmakers Unite to Pass Cryptocurrency Fraud Prevention Legislation

AARP Nebraska

Nebraska’s cryptocurrency landscape has been evolving, and so have the risks associated with it. The Nebraska Legislature’s proposed Controllable Electronic Record Fraud Prevention Act (Legislative Bill 609), introduced by State Senator Eliot Bostar and endorsed by AARP Nebraska, passed final reading on March 6, and now awaits Governor Pillen’s signature to become law.

This crucial legislation was designed to implement consumer protections from scams involving gift cards and cryptocurrency kiosks—also known as digital currency ATMs. Similar in appearance to a bank ATM, they allow people to conduct cryptocurrency transactions, such as sending money through a digital wallet. Once the money is gone, it's very hard to track and recoup.

Until the passage of LB609, these kiosks have been largely unregulated at the state level compared to traditional financial institutions, lacking sufficient consumer fraud protections. Because of this, criminals have been using them to commit fraud and steal millions of dollars through highly sophisticated scams, putting older Nebraskans’ hard-earned retirement savings at risk.

Todd Stubbendieck, State Director of AARP Nebraska, shared “Today is a significant day for Nebraskans. When lawmakers unite on an issue, regardless of their political affiliations, it sends a powerful message. AARP is grateful the Nebraska Legislature acknowledged the urgent need to safeguard our communities from the rising threat of cryptocurrency kiosk scams.”

In 2023 alone, the FBI received over 5,500 complaints involving cryptocurrency kiosks, with reported losses amounting to over $189 million. Alarmingly, more than 65% of these losses were incurred by individuals aged 60 and above. Overall, the FBI reported $5.6 billion in crypto-fraud losses in the same year.

Nebraskans themselves reported 239 digital currency scam complaints in 2023, totaling approximately $14.6 million in losses. The actual losses are likely higher, as many victims are hesitant to report scams due to embarrassment.

The bill establishes requirements around licensing of state operators to ensure only vetted operators manage these kiosks; daily transaction limits to protect consumers from large-scale theft; fraud warning notices to increase awareness about potential scams; transaction receipts to provide traceability to assist law enforcement with criminal investigations; fee caps to prevent excessive charges; and that cryptocurrency operators issue refunds for transactions identified as fraudulent.

This is a huge win for Nebraskans and law enforcement who eagerly await the final step to get this law across the finish line. The governor has five days, excluding Sundays, to decide what to do with the bill. If the governor signs a bill or declines to act on it, the bill becomes a state law.