New Jersey Crime Watchdog Says Crypto ATMs Need More Regulation

State regulation of crypto ATMs is poor and federal laws aren't much better, the commission said in a report.

Feb 19, 2021 at 12:01 p.m. UTC
Updated Sep 14, 2021 at 12:14 p.m. UTC

New Jersey's independent watchdog on organized crime, public corruption and financial waste says cryptocurrency ATMs pose a risk to the public because of a lack of regulatory oversight.

According to a report released on Wednesday by the New Jersey State Commission of Investigation (SCI), there is no "state regulation of their [cryptocurrency ATMs] operation."

The watchdog also said that because of their complexity federal laws don't provide enough protection against money laundering and other financial crimes.

The CSI looked at 30 businesses and about 300 cryptocurrency kiosks as part of a five-year investigation and found instances where the machines were used to commit scams and orchestrate "questionable transactions."

"Some transactions appeared arranged in a way that enabled users to circumvent machine requirements to produce a valid form of identification or to avoid triggering specific federal currency reporting rules," the report said.

The watchdog recommended a "licensing mechanism" – such as a government ID – be required for a person to access cryptocurrency ATMs in order to curb the risk of financial fraud and misconduct.

To get a license, an applicant would have to submit a criminal report and report ongoing litigations and bankruptcy filings within the last 10 years.

The state's investigator also recommended updating existing regulations to expand the period a person's records are stored from the one-year period now required and apply the same standards that exist for businesses in the banking industry.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Terra Devs Need a Home. Other Blockchains Are Courting Them

Armed with multimillion-dollar ecosystem funds, chains like Polygon and Kadena are trying to woo coders whose work is endangered by Terra’s meltdown.

Armed with multimillion-dollar ecosystem funds, chains like Polygon and Kadena are trying to woo coders whose work is endangered by Terra’s meltdown.

CoinDesk - Unknown
2
CoinDesk - Unknown
Circle Recommends Against a Digital Dollar, and Ethereum Beacon Chain Suffers Longest ‘Reorg’ in Years

The most valuable crypto stories for Thursday, May 26, 2022.

The most valuable crypto stories for Thursday, May 26, 2022.

CoinDesk - Unknown
3
CoinDesk - Unknown
Huobi Acquires Latin American Crypto Exchange Bitex

The Chinese crypto exchange is seeking to expand in Latin America, but Bitex will continue to operate under the same name and with its current management team.

The Chinese crypto exchange is seeking to expand in Latin America, but Bitex will continue to operate under the same name and with its current management team.

CoinDesk - Unknown
4
CoinDesk - Unknown
What's the Crypto 'Travel Rule,' and What Does It Mean for You?

The measure is essential to prevent bad actors from using digital assets to launder money. It affects everyone who dabbles in cryptocurrencies from exchanges to everyday investors.

The measure is essential to prevent bad actors from using digital assets to launder money. It affects everyone who dabbles in cryptocurrencies from exchanges to everyday investors.

CoinDesk - Unknown