Hoosier lawmakers on Wednesday pushed their attempt to regulate digital currency kiosks — commonly known as cryptocurrency ATMs — into an all-out ban. They also walked back legislation letting crypto into public pension investments.
House Bill 1116 previously would’ve required kiosk operators to get licensed, verify customers’ identities and operate under strict limits on transaction amounts and fees. Operators at last week’s hearing complained the measure would drive them out of business in Indiana, while law enforcement and retiree witnesses warned of the kiosks’ roles in devastating scams.
Now, crypto ATMs could be outlawed entirely — as soon as this month — if the legislation becomes law.
“We’re never in the business of putting anybody out of business. That’s not our goal here, in the state of Indiana,” said Sen. Scott Baldwin, R-Noblesville. But, he added, “I can think of no … substantial legitimate reasons” to warrant the kiosks.
“I think these kiosks have a strong propensity to be … havens for money laundering, and havens for tax evasion,” said Baldwin, who leads the Senate’s financial institutions panel.
Baldwin’s amendment, which was accepted in a bipartisan 7-0 vote, ditches the regulations in favor of banning the operation of crypto ATMs in Indiana.
Under the updated bill, operating a kiosk would be an illegal deceptive act. The state’s attorney general could sue the operator and the owner of the property on which the kiosk is located.
Courts could make violators forfeit the kiosks to the state, along with the amount of money collected from users. They could also be required to pay the attorney general all costs associated with the investigation.
Baldwin said he can “transfer money that I’ve paid taxes on into crypto” using his phone, “so I don’t want the crypto folks to think that we’re trying to kill crypto.”
The measure, advanced in a 6-1 vote, would be effective upon passage. Lawmakers plan to wrap up work this month, but the governor has several days to sign approved bills into law.
The committee also accepted an amendment to remove a key pension investing provision from House Bill 1042. It previously would have allowed the state to invest public retirement plan assets into crypto exchange traded funds.
“Frankly, we just need to work on it over this next year. That product is not doing extremely well,” said author Rep. Kyle Pierce, R-Anderson. “I do think if we’re going to allow one side to invest, the defined contribution side, we shouldn’t just leave the other side out to dry.”
The proposal still would allow members of certain plans to choose self-directed brokerage accounts offering crypto investment options. The committee discussed, at length, another amendment removing those provisions, but Baldwin decided not to call it.
“You have an individual choice” in that case, Pierce emphasized, as opposed to the plans for which the state handles investment decisions.
The panel advanced the bill in a 6-2 vote, along party lines. Baldwin said lawmakers would “continue to talk” and, if necessary, do another amendment on second reading.
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