PIERRE, S.D., Jan 27, 2026, 04:30 CST
- South Dakota’s Senate Bill 98 aims to cap fees on crypto kiosks, impose transaction limits, and mandate customer ID verification
- The proposal also mandates fraud warnings at kiosks and refunds for many scam victims who submit reports
- Reports out of Wyoming and Wisconsin reveal scammers urging victims to pour cash into cryptocurrency ATMs
South Dakota lawmakers rolled out Senate Bill 98 to clamp down on “virtual currency kiosks,” those crypto ATMs that convert cash into digital tokens. The move comes amid rising scam losses flagged by officials and law enforcement.
The initiative arrives amid a surge in crypto-related fraud cases flooding local police departments, where victims are frequently advised to act quickly and keep silent.
South Dakota Attorney General Marty Jackley pointed to FBI figures showing $13.8 million lost in cryptocurrency scams reported to the agency’s Internet Crime Complaint Center in 2024. Notably, victims over 60 made up $7.8 million of those losses.
Scammers frequently impersonate law enforcement, banks, or tech support, convincing victims to withdraw cash and load it into a crypto ATM while keeping them on the line. After the crypto hits a wallet address—the transfer’s destination code—the funds are typically nearly impossible to recover.
The bill adds fresh consumer protections to South Dakota’s current money-transmitter licensing framework. It mandates receipts and clear warnings that crypto isn’t government-backed or covered by entities like the FDIC. Under SB 98, fees would be capped at 3%, with daily limits of $1,000 and a $10,000 cap over 30 days. Victims who file a police report would be entitled to full refunds within 72 hours. The legislation also enforces identity checks, requires live customer support, and implements anti-fraud measures, including software to block transfers to fraud-linked addresses—some overseas. Operators must also provide annual training for staff at kiosk locations.
Republican Senator Steve Kolbeck, the bill’s prime sponsor, emphasized the aim to fight fraud without halting crypto trading. “This isn’t about stopping folks from buying, selling, or trading cryptocurrency,” Kolbeck said. Lawmakers want “bumpers” in place before victims “start stuffing cash” into the machines. https://stocktwits.com/news-articles/marke… https://www.keloland.com/news/local-news/c…
Legislative records reveal the bill carries bipartisan backing, including support from Democratic lawmakers. It was first introduced in the Senate and sent to the Senate Commerce and Energy Committee on Jan. 20.
Warnings have come sharply from other parts of the region. Gillette Police Detective Alan Stuber told an AARP webinar that residents in Gillette and Campbell County lost over $3 million to crypto ATM scams in the past year. Law enforcement has handled “75 to 100 cases” during that time. https://wyofile.com/local-lookout-ice-prot… https://www.gillettenewsrecord.com/news/lo…
In Wisconsin’s Fox Valley, a woman going by Beth recounted how a pop-up on her computer warned of a Microsoft Office “breach.” She ended up on the phone for hours after calling the provided number, withdrawing cash, and feeding it into a crypto ATM at a gas station. It only hit her as a scam when the caller insisted she buy $5,000 worth of Home Depot gift cards.
Michael Gavigan from the Wisconsin Department of Financial Institutions flagged a familiar warning: “Anytime someone comes to you urgent request and they’re asking you to do something with money, that’s a major red flag.” According to the report, FBI data reveals Wisconsin residents lost over $43 million in 2024, with scams involving crypto ATMs soaring 99% in just a year. https://www.wbay.com/2026/01/23/consumer-f…
Tighter rules might not stop the scams altogether. Fraudsters could simply move to different payment methods, while operators might fight refunds or cut back services if compliance costs climb. That leaves enforcement to state regulators and local police already stretched thin handling these cases.
SB 98 remains stuck in committee for the moment. Should it pass, South Dakota would become one of several states moving to clamp down on a scam that begins with a phone call and ends with money disappearing into a machine.
