Crypto Bills Vetoed in Arizona; Bitcoin ATMs Hit $2K Cap – Here’s the Risk

Arizona’s treasury swerved away from a crypto cliff when Governor Katie Hobbs took decisive action against two crypto bills. She vetoed SB 1373, which would have established a Digital Assets Strategic Reserve Fund for the state to hold crypto assets obtained through seizures or legislative allocations.

In addition, Governor Hobbs rejected SB 1024, which would have permitted state agencies to accept cryptocurrency payments for taxes, fines, and fees. The two vetoed crypto bills reflect a cautious and risk-averse stance toward digital assets.

What Risks Did Governor Hobbs See in Crypto Expansion?

The office of Governor Hobbs clarified her rationale for vetoing the crypto bills. Regarding Senate Bill 1373, Governor Hobbs expressed concerns about the current volatility in cryptocurrency markets.

She argued that such instability makes allocating state funds to digital assets financially irresponsible.

Governor Hobbs rejected Senate Bill 1024 because, while it tried to help state agencies handle crypto risks, she saw too much danger in the plan.

Just days before, on May 3, she vetoed Senate Bill 1025, a push to put the state retirement funds into Bitcoin. The Governor stated that Arizonans’ savings shouldn’t be invested in digital assets.

Some saw these moves as anti-innovation. However, a closer examination reveals a strategy rooted in caution and protecting residents.

Proof came on May 7, when Hobbs signed HB 2749, a smart compromise. Now, Arizona can claim forgotten crypto to seed a state Bitcoin fund without putting taxpayers’ money at risk.

This action positions Arizona as the second U.S. state to create a government-backed Bitcoin reserve fund, following New Hampshire.

According to official statements, HB 2749 is designed to operate without utilizing taxpayer dollars or state revenue. Instead, Arizona’s Bitcoin Reserve will be composed entirely of unclaimed crypto assets, including digital assets that have been forgotten or left untouched for years.

The state can legally claim those assets if a person owns cryptocurrency but has not responded to official notices for three years.

This approach ensures that public funds and pensions remain unaffected. It relies solely on unclaimed digital assets that would otherwise go unused.

HB 2749 is Arizona’s way of stepping into the crypto space without asking its citizens to take on financial risk, and it mirrors what the U.S. federal government already does. At the national level, the government builds its Bitcoin holdings through law enforcement seizures, not purchases.

Will Stricter Bitcoin ATM Rules Protect Arizona Residents?

Meanwhile, Governor Hobbs approved House Bill 2387, which introduces a set of regulations for Bitcoin ATMs. The bill mandates that Bitcoin ATM operators display warnings about crypto scams in multiple languages to improve understanding and prevent fraud.

Receipts issued must include transaction data, contact information, and fees. The daily transaction limit is $2,000 for new customers and $10,500 for returning users after ten days.

Additionally, Bitcoin ATM providers must integrate 24/7 customer service numbers for complaints.

If users are scammed under false pretenses, they must provide proof within 30 days to be eligible for a full refund, including fees. Governor Hobbs’ approval of these policies is intended to further protect residents from ongoing scams.

According to the FBI’s 2023 report on cryptocurrency fraud, Arizona residents lost approximately $127 million to virtual currency fraud, with people over 60 being the most targeted.

Arizona is not alone in its efforts to regulate Bitcoin ATMs. In March, the North Dakota Senate passed House Bill 1447. The law seeks to establish strict regulations on crypto ATM operations to curb fraudulent activities and protect users.

If signed into law, it would impose licensing requirements on operators, mandate fraud warnings, and set a daily transaction cap of $2,000 per user.

Similarly, Nebraska Governor Jim Pillen signed the Controllable Electronic Record Fraud Prevention Act. This introduces stringent licensing and reporting requirements for all Bitcoin ATMs.

U.S. Senator Dick Durbin of Illinois has also proposed federal legislation targeting Bitcoin ATM scam.

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