Delaware lawmakers are moving to curb the spread of predatory Bitcoin ATMs with a bill that advanced through the state legislature this week. The legislation, which targets machines that charge exorbitant fees or are placed in deceptive locations, is meant to protect residents who fall victim to scams involving cryptocurrency kiosks.
What the bill does
The bill, still under discussion in Dover, would impose licensing requirements on Bitcoin ATM operators and cap transaction fees. Supporters say the machines often target elderly or less tech-savvy consumers, with some kiosks charging markups as high as 20% per transaction. Under the proposal, operators would also have to post clear disclosures about fees and provide a cooling-off period for first-time users.
Why now
Delaware isn't the first state to take aim at Bitcoin ATMs — a handful of others have already passed or proposed similar rules in the past two years. But the uptick in complaints to state financial regulators appears to have pushed the issue to the front of the queue in Dover. Consumer advocates say the machines are increasingly used in "phishing" scams where victims are directed to deposit cash into a kiosk that immediately converts it to crypto and sends it to the scammer, leaving the victim with little recourse.
What comes next
The bill cleared a key committee vote in the state senate late Tuesday. It now heads to the full chamber for a vote, expected before the end of the current legislative session. If it passes, Delaware would join New York, Texas, and a handful of other states with laws on the books specifically targeting the machines. The crypto industry has pushed back against the bill, arguing it would stifle legitimate use, but proponents say the consumer protections are overdue.
Unresolved questions
It's still unclear how the state would enforce the new rules — the bill doesn't specify which agency would inspect kiosks or handle complaints. That may be hammered out in amendments before a final vote. For now, Delaware residents who encounter a suspicious Bitcoin ATM have to rely on traditional bank alerts to try to claw back losses, a process that often fails.
