Wisconsin plans strict KYC rules for Bitcoin ATMs with photo ID required for every transaction.
The new bill sets a $1000 daily limit on Bitcoin ATM purchases and demands detailed personal data collection.
Operators may face high compliance costs and data security risks under Wisconsin’s proposed crypto law.
Wisconsin lawmakers are advancing Senate Bill 386 and Assembly Bill 384 to regulate Bitcoin ATM activity. The proposals would impose strict Know Your Customer requirements on all cryptocurrency transactions conducted through these machines.
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Every purchase, regardless of value, would require a valid photo identification. The bills also propose a $1,000 daily transaction limit for each user. Operators would need to collect and store detailed personal information, aligning services with anti-money laundering standards.
State Classification of Bitcoin ATMs
The Wisconsin Department of Financial Institutions has classified Bitcoin ATMs as money transmission services. This classification requires operators to obtain a license under the state’s Money Transmission Law.
Compliance measures would include identity verification checks, secure storage of customer data, and photographic proof of verification. Operators would also face financial liability for fraudulent transactions processed through their machines.
Privacy and Security Concerns
Critics in the cryptocurrency sector warn that these measures may reduce financial privacy for users. Bitcoin ATMs have traditionally been valued for offering quick and relatively anonymous transactions.
Storing sensitive personal data could raise security risks, particularly the threat of data breaches. Privacy advocates also note that such strict measures may deter individuals seeking discreet access to digital assets.
Impact on Operators and Users
For operators, the proposals would add significant administrative burdens. Compliance would require investment in verification systems, record-keeping, and transaction monitoring. Smaller operators could struggle with the costs and may consider shutting down machines.
For users, the new rules could reduce convenience and accessibility. The $1,000 cap may limit legitimate large transactions, forcing individuals to use alternative methods. These changes could slow adoption among those who value privacy and ease of use.
Part of a Wider Regulatory Trend
The Wisconsin legislation reflects a growing trend of tighter oversight on cryptocurrency infrastructure. Several countries have already implemented similar controls to monitor and restrict digital asset transactions. Meanwhile, Australia recently introduced strict regulations to govern Bitcoin ATMs in the country.
Within the United States, crypto regulation often varies by state. New York’s BitLicense framework targets a broad range of virtual currency businesses, while Wisconsin’s proposal focuses on Bitcoin ATMs. Both approaches show increasing state involvement in shaping crypto compliance.
If passed, SB386 and AB384 could set a precedent for other states to follow. Lawmakers across the country are monitoring such efforts as they consider their own approaches to digital asset regulation. The bills are still under review, and their final form will determine the extent of changes for Wisconsin’s cryptocurrency market.
