New crypto regulation

Gov. Pillen signs new protection law

Governor Jim Pillen this week enacted a new law aimed at addressing cryptocurrency fraud, emphasizing Nebraska's commitment to fostering a "safe and robust crypto industry." On Tuesday, Pillen signed Legislative Bill (LB) 609, known as the Controllable Electronic Record Fraud Prevention Act, which received unanimous approval from the Legislature last week with a vote of 48-0. The governor praised the bipartisan bill, spearheaded by State Sen. Eliot Bostar of Lincoln and supported by law enforcement, as "good news" for consumers in the rapidly growing crypto sector. “Our efforts to position Nebraska as a leader in cryptocurrency have been relentless,” Pillen stated in a Wednesday announcement. “A key element of this initiative is ensuring protective measures are in place to stop criminals from exploiting Nebraskans,” he concluded. 

Bostar expressed his gratitude to Gov. Pillen for signing the bill into law, stating that it aims to address both traditional and emerging forms of fraud, especially in relation to cryptocurrency kiosks. He highlighted that these kiosks are often used to facilitate the transfer of stolen funds from unsuspecting Nebraskans to international criminal organizations. “Once someone falls victim to a payment or funds transfer through these crypto kiosks, the money is typically lost for good,” Bostar remarked. LB 609 would grant law enforcement the authority to assist Nebraskans in recovering funds lost in this manner and mandate new consumer disclosures. 

According to the bill, these disclosures will outline various types of criminal activity and note that consumer fraud frequently starts with unsolicited contact from strangers. The warnings aim to encourage individuals who suspect they have been scammed to reach out to law enforcement. Additionally, Bostar’s legislation mandates similar warnings for specific gift cards sold by third-party vendors. “It serves as a cautionary note, allowing individuals a moment of reflection on their decisions,” Bostar noted.

The law stipulates a limit on daily digital transactions at $2,000 for new customers and $10,500 for established or long-term customers. Consumers will receive a transaction receipt that includes information on refund and liability policies. New customers will have the option to request a full refund for fraudulently induced digital transactions, which will also cover fees, while existing customers will be restricted to refunds on fees only.

All cryptocurrency kiosk operators in Nebraska will be required to provide live customer service support from Monday to Friday, between 7 a.m. and 9 p.m. Additionally, they must establish a specific contact method for law enforcement to use when necessary. Todd Stubbendieck, the state director of AARP Nebraska, who supported the legislation, hailed the bill's signing into law as a “significant victory for Nebraskans and law enforcement.” “With enhanced protections against cryptocurrency theft, we can better protect the hard-earned savings of Nebraskans, particularly those aged 50 and older, from financial exploitation,” Stubbendieck stated.

By: Robert Tengker