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California court upholds $1,000 daily withdrawal limit for crypto ATMs

GrafaGrafa2024/09/05 03:15
By:Isaac Francis

The Superior Court for Los Angeles County has upheld the Digital Financial Assets Law (DFAL), which includes a $1,000 daily withdrawal limit for cryptocurrency ATMs in California. 

The court's decision confirms the consumer protection measures outlined in the DFAL, requiring crypto ATM operators to obtain licenses, comply with fee limits, and provide new disclosures to users.

The ruling came after the Alliance for the Fair Access to Cryptocurrency Terminals filed a lawsuit in January, challenging the $1,000 daily withdrawal cap at these crypto kiosks. 

The group argued that the restriction was unreasonable and exceeded the authority of the state legislature. 

However, the court sided with the California Department of Financial Protection and Innovation (DFPI), stating that the daily transaction limit is a reasonable approach to reducing fraud at cryptocurrency ATMs.

DFPI Commissioner Clothilde Hewlett emphasised the significance of these regulations, noting that the $1,000 daily limit is a "common-sense restriction" designed to protect consumers from fraudulent transactions and prevent the misuse of kiosks for illicit activities. 

Hewlett also reiterated the department's commitment to implementing this legislation to foster responsible innovation in California's crypto industry while safeguarding its residents.

The DFAL not only imposes a daily withdrawal cap but also limits the fees that crypto kiosk operators can charge and requires them to apply for a license under the new law. 

These measures are part of a broader regulatory framework established by the DFAL, which was signed into law in October 2023. 

The law mandates that digital financial asset businesses in California obtain licenses and comply with various regulations starting from July 2025.

With the court’s decision, California moves forward with a more regulated approach to cryptocurrency operations, aiming to balance innovation with consumer protection and fraud prevention.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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