Alaska House Committee Advances Cryptocurrency Kiosk Regulations After Scam Victims Lose Millions

The Alaska House Labor and Commerce Committee advanced consumer protection legislation Wednesday requiring licensing, transaction limits, and fraud warnings on cryptocurrency kiosks after Alaskans reported $26 million in online fraud losses in 2024.

The committee reported out Senate Bill 249 without objection after adopting amendments that set a $1,000 daily transaction limit and capped fees at 10 percent. The bill is the companion to House Bill 324, which the committee heard in April.

The legislation responds to a surge in fraud targeting seniors, including an $8,000 loss suffered by bill sponsor Senator Cathy Tilton's mother through a scam that used artificial intelligence to clone the senator's voice.

Tilton told the committee her mother received what sounded like a distress call in Tilton's voice, directing her to withdraw cash and deposit it at cryptocurrency kiosks. The scammers walked her through multiple transactions over two hours before she realized the fraud. Alaska currently has no meaningful regulation of the kiosks, which Tilton called a "regulatory black hole."

"In 2024 alone, Alaskans lost $26 million to online fraud, and the seniors accounted for roughly one-third of those losses," Tilton said. "The kiosks have become the scammers' favorite tool because the transactions are instant, irreversible, and largely untraceable."

Tilton cited FBI data showing Alaska scams rose more than 43 percent year over year, with seniors' losses topping $16 million.

The committee substitute adopted Wednesday splits the difference between House and Senate versions on transaction limits. The Senate had approved a $1,500 daily limit, while the House companion bill proposed $500. The compromise $1,000 limit came at the request of AARP Alaska, which has advocated for stronger consumer protections.

The bill also sets a $10,000 monthly limit so transactions are federally reportable. It requires kiosks to use blockchain analytics to block transfers to known illicit or overseas wallets. Operators must post clear warning signs about fraud, verify customer identity, and provide receipts for all transactions.

Under the legislation, kiosk operators would need state licenses and must refund fees in cases of fraudulent transactions. The 10 percent fee cap applies to legitimate users, including unbanked Alaskans who use the kiosks to pay bills or send money. Tilton said the fee level is comparable to Western Union and other money transfer services.

Representative Zack Fields noted that testimony from earlier hearings indicated more than 90 percent of cryptocurrency kiosk transactions in Alaska are scams or fraud. He said the reporting requirements in the bill could provide data to support future action, including a possible ban on the kiosks.