Two bills to regulate digital currency in South Dakota are on their way to Gov. Larry Rhoden’s desk after supportive votes in both chambers of the legislature.
One bill is meant to curb scams involving digital currency kiosks; the other would define cryptocurrency as a seizable asset.
U.S. citizens lost $9.3 billion in crypto assets in 2025, Attorney General Marty Jackley told lawmakers in the House Judiciary Committee in support of the latter bill. South Dakotans were scammed out of $13.8 million in digital currency that year, he said.
The asset bill was presented on Jackley’s behalf as part of his 2026 legislative package. His office supported the kiosks bill, whose prime sponsors are Brandon Republican Sen. Steve Kolbeck and Pierre Republican Rep. Mike Weisgram.
Millions lost through digital kiosks
South Dakotans lost over $500,000 in 2025 in connection to scams involving cryptocurrency kiosks, Clark Police Chief Jeremy Wellnitz told members of the House Commerce and Energy Committee on Monday. Across the county, the kiosks were involved in $333 million in losses.
The kiosks are physical machines where customers can buy or sell cryptocurrency with cash. They have become a “common tool” for scammers, he said, as did several other law enforcement officials from across the state. Scammers will connect with victims through social media, text message or phone call and convince the victim they need to take out cash from their bank account and send it to the scammer’s “digital wallet” through a digital currency kiosk.
Senate Bill 98 would require digital kiosk operators to be licensed with the state, Weisgram said. It would also require operators to set $1,000 daily transaction limits to “prevent significant financial losses,” print paper receipts for customers, explain terms and conditions before a transaction, disclose fees and transaction rates, and refund victims of fraud.
South Dakota already licenses 10 operators in the state, said Bret Afdahl, director of the South Dakota Division of Banking with the South Dakota Department of Labor and Regulation. There are 172 kiosks throughout South Dakota, he said, primarily in urban areas.
He told lawmakers that cryptocurrency kiosk companies have filed 158 currency transaction reports involving more than $10,000 in cash in South Dakota in the last two years. The companies filed seven reports for suspected fraud or money laundering during that timeframe.
“We really need to flip the incentive structure here with these kiosks right now,” Afdahl said. “These kiosk providers profit from every dollar that comes in, whether it’s a legitimate transaction or not, and we need to incentivize them to prevent these frauds from occurring.”
Supporters of the bill included representatives for banking, law enforcement and consumer protection organizations. Cryptocurrency industry representatives spoke against it.
You can read the full article at South Dakota Searchlight.