Committee advances SB189 to license crypto ATMs after AARP raises consumer-protection concerns

A Kentucky Senate committee advanced Senate Bill 189, as amended by a committee substitute (PSS 2), to create a licensing and consumer-protection framework for virtual-currency kiosks, commonly called crypto ATMs. Sponsors described the measure as a way to prevent large-scale fraud, particularly among older Kentuckians, while AARP urged stronger limits and safeguards.

Senator Rawlings (identified in the transcript as the bill sponsor) told the committee that crypto kiosks have become tools for scammers who impersonate banks or government agencies to pressure victims into converting cash to cryptocurrency and wiring funds to criminals. The substitute establishes a uniform licensing system and minimum financial safeguards, including a $100,000 surety bond and net-worth requirements, mandatory receipts and disclosures, anti-fraud and security policies, a 72-hour hold or refund window for suspected fraud on new customers, and regulatory authority for the Kentucky Department of Financial Institutions to investigate and enforce compliance.

Daniel Rose, AARP Kentucky dvocacy manager, said AARP supports regulating kiosks but that the committee substitute weakens protections compared with AARP—est-practice recommendations. "Should this sub be enacted as it is, this would be the least amount of consumer protections regarding crypto kiosks in the nation of those states who have passed legislation," Rose said, urging lower transaction caps and mandatory identity verification, required receipts, and explicit scam warnings.

Gary Atkins, AARP Kentucky state president, added local examples and data, saying coin-ATM trackers show several hundred kiosks operating across the Commonwealth in gas stations, supermarkets, vape shops and liquor stores, and that national investigations find a very high share of kiosk-linked transactions are scams. Atkins cited federal and state reports showing disproportionate impacts on people 60 and older and urged point-of-transfer guardrails to deter victims.

The committee adopted the committee substitute by voice vote and later moved and recorded a roll call on the bill as amended; several senators explained their yes votes while expressing desire to strengthen consumer protections before floor action. The chair announced SB189 passes the committee with favorable expression and will go to the floor.

Details to watch: the substitute in committee set a 3,000 daily transaction maximum for new customers and higher limits for returning users (committee language referenced a higher returning-user cap); AARP recommended a $1,000 daily cap for new users and $10,000 in 30 days. Sponsors said they plan additional stakeholder discussions and prospective floor amendments to address outstanding AARP concerns.