New Jersey Crime Watchdog Says Crypto ATMs Need More Regulation
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.
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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.
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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.
