Arizona Governor Vetoes Crypto Reserve Bills, Approves Anti-Fraud Regulation on Crypto ATMs

Arizona Governor Katie Hobbs on Monday vetoed two state Senate bills that would have expanded crypto usage in state operations, saying the assets are “too risky” to be involved with public funds. At the same time, she signed into law a regulatory measure to prevent fraudulent transactions through digital currency ATMs.

Hobbs turned down Senate Bill 1373, which sought to establish a Digital Assets Strategic Reserve Fund for the state to manage and hold digital currencies already seized through legal proceedings or received via legislative appropriations. 

“Current volatility in cryptocurrency markets does not make a prudent fit for general fund dollars,” Hobbs wrote in a veto letter addressed to Senate President Warren Petersen.

Last week, the Arizona governor vetoed Senate Bill 1025, titled the “Arizona Strategic Bitcoin Reserve Act.” would have allowed the state to invest up to 10% of treasury surplus and retirement fund assets in Bitcoin and other digital assets. Hobbs was not up for subjecting taxpayer-backed funds and retirement portfolios to the risks of crypto market fluctuations.

Crypto payment bill blocked

The other halted proposal was Senate Bill 1024, a law that could allow Arizona state agencies to accept cryptocurrency as payment for fines, taxes, and fees. The bill included provisions that required the offices to partner with vetted crypto service providers, but Hobbs reiterated that it still posed too much exposure to financial instability.

Arizona lawmakers advanced all three measures in an effort to embed digital assets into state operations, but the governor is hesitant to commit public resources or processes to the “still-evolving” technology.

Arizona now joins at least nine other US states that have formally rejected similar legislative efforts to create public sector Bitcoin reserves, according to Bitcoin Laws data.

Crypto ATM oversight signed into law

Governor Hobbs gave her approval to House Bill 2387, a regulatory framework for cryptocurrency kiosks and ATMs across the state. Under the new law, operators of cryptocurrency kiosks and ATMs are now required to display fraud warnings in multiple languages to alert all users about potential scams. 

Moreover, receipts issued at these kiosks must now include specific transaction details, such as the transaction hash and the wallet address involved. The details are required by law enforcement to expedite investigations of fraudulent activities.

Lastly, operators are required to keep detailed records of every transaction and follow all anti-money laundering (AML) protocols.

As reported by Cryptopolitan last Wednesday, the governor signed House Bill 2749, which was brought forward by House Commerce Committee Chairman Jeff Weninger, and updates Arizona’s unclaimed property statutes to include digital assets.

Previously, the state would liquidate any unclaimed crypto into fiat currency. Now, the law allows Arizona to hold unclaimed digital assets in their original crypto status. 

Louisiana non profit organization advocates for protection from crypto scams

In other related news, non-profitable organization AARP Louisiana is backing House Bill 483, sponsored by State Rep. Mark Wright, meant to protect crypto holders against crypto-related scams, particularly those targeting senior citizens.

The Louisiana proposal places a $3,000 daily transaction limit on crypto ATM users and mandates a 72-hour delay before any transaction is processed. This “cooling-off” period could help fend off common scammers that pressure victims into sending money quickly.

“There’s a need to get ahead of the technology and have protections in place,” said Denise Bottcher, state director of AARP Louisiana, during a Press Club of Baton Rouge event on Monday. “Fraud is growing at an alarming rate, and sadly, older adults are often the target.”

Bottcher said the organization wanted a lower transaction threshold, but could “live with” the $3,000 figure with the mandatory delay. 

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