At least 170 virtual currency kiosks can be found around the state, but with the lack of regulation, bad actors have been able to take advantage of people. Karl Adam, president of the South Dakota Bankers Association, said, “These crypto kiosks are legitimate businesses; however, these bad actors do prey on people to get them to take their hard-earned money, take it to these kiosks, and funnel money to them.” South Dakota has seen plenty of notable crypto scams, including false jury duty fines and the impersonation of law enforcement, and these efforts are constantly evolving. Erik Nelson, Advocacy Director for South Dakota AARP, said, “There’s always fraud and scams we will want to make our members aware of, but putting some guardrails on cryptocurrency machines is a good first step to addressing some cryptocurrency scams that were happening in this area, particularly.”
According to Clark Police Chief Jeremy Wellnitz, cryptocurrency is nearly impossible to reverse, and unlike traditional wire transfers or checks, which can take days to process, crypto transactions are completed in seconds, allowing fraudsters to make money disappear quickly. “Cryptocurrency is decentralized and pseudonymous; there is no central institution to contact. Once funds are transferred to a fraudulent wallet, they can be moved through multiple international accounts within minutes. While blockchain analysis tools are improving, recovery remains rare and requires immediate reporting and multi-agency coordination,” Wellnitz said. Senate Bill 98 aims to make these scams as difficult as possible by establishing mandatory licensing for virtual currency kiosk operators, setting daily transaction limits of $1,000, requiring licensees to post fraud warning notices and refund fraud victims, plus other regulations. Senate Bill 98 goes into effect at the beginning of July, giving operators time to implement these changes.
There are many signs of a potential cryptocurrency scam, including: these signs include requests for payment exclusively in cryptocurrency and unsolicited investment opportunities promising guaranteed or unusually high returns. “Romance” contacts who steer conversations toward crypto investment platforms, urgent requests to send crypto to protect existing assets, and instructions to keep transactions secret are also red flags.
Leave a Reply