LB 609 (2025) — Controllable Electronic Record Fraud Prevention Act (kiosks), slip law
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LB609 LB609
2025 2025
LEGISLATIVE BILL 609
Approved by the Governor March 11, 2025
Introduced by Bostar, 29.
A BILL FOR AN ACT relating to financial transactions; to amend section 29-817,
Reissue Revised Statutes of Nebraska; to adopt the Controllable Electronic
Record Fraud Prevention Act; to require notice of potential fraud for
purchasers of gift certificates and gift cards; to change provisions
relating to search warrants; to provide severability; and to repeal the
original section.
Be it enacted by the people of the State of Nebraska,
Section 1. Sections 1 to 11 of this act shall be known and may be cited
as the Controllable Electronic Record Fraud Prevention Act.
Sec. 2. For purposes of the Controllable Electronic Record Fraud
Prevention Act:
(1) Blockchain analytics means the analysis of data from blockchains or
public distributed ledgers, including associated transaction information;
(2) Blockchain analytics software means a software service that uses
blockchain analytics data to provide risk-specific information about
controllable electronic record addresses, among other things;
(3) Controllable electronic record has the same meaning as in section
8-3003;
(4) Controllable electronic record address means an alphanumeric
identifier associated with a controllable electronic record wallet identifying
the location to which a controllable electronic record transaction can be sent;
(5) Controllable electronic record kiosk means an electronic terminal
acting as a mechanical agent of the controllable electronic record kiosk
operator to enable the controllable electronic record kiosk operator to
facilitate the exchange of controllable electronic records for money, bank
credit, or other controllable electronic records, including, but not limited
to, by (a) connecting directly to a separate controllable electronic record
exchange that performs the actual controllable electronic record transmission
or (b) drawing upon the controllable electronic record in the possession of the
electronic terminal's operator;
(6) Controllable electronic record kiosk operator means a person, or a
third party acting on behalf of another person, that engages in controllable
electronic record business activity via a controllable electronic record kiosk
located in this state or a person that owns, operates, or manages a money
transmission kiosk located in this state through which controllable electronic
record business activity is offered;
(7) Controllable electronic record kiosk transaction means a transaction
conducted or performed, in whole or in part, by electronic means via a
controllable electronic record kiosk. Controllable electronic record kiosk
transaction includes a transaction made at a controllable electronic record
kiosk to purchase controllable electronic records with United States dollars or
to sell controllable electronic records for United States dollars; and
(8) Controllable electronic record wallet means a software application or
other mechanism providing a means to hold the keys necessary to access and
transfer controllable electronic records;
(9) Customer means new customers and existing customers;
(10) Department means the Department of Banking and Finance;
(11) Existing customer means an individual whose first controllable
electronic record kiosk transaction with the controllable electronic record
kiosk operator was more than fourteen days prior;
(12) New customer means an individual during the fourteen-day period after
such individual's first transaction with the controllable electronic record
kiosk operator that the individual has never previously transacted with. The
individual shall remain defined as a new customer during the fourteen-day
period after the first controllable electronic record kiosk transaction with
the controllable electronic record kiosk operator; and
(13) Transaction hash means a unique identifier made up of a string of
characters that acts as a record of and provides proof that the transaction was
verified and added to the blockchain.
Sec. 3. (1) A controllable electronic record kiosk operator shall not
engage in controllable electronic record kiosk transactions or hold itself out
as being able to engage in such transactions with or on behalf of another
person unless the kiosk operator has a license issued under the Nebraska Money
Transmitters Act pursuant to section 8-2725.
(2) A controllable electronic record kiosk operator shall report each
controllable electronic record kiosk as an authorized delegate under the
Nebraska Money Transmitters Act pursuant to section 8-2730.
(3) In addition to the required reporting of authorized delegates pursuant
to section 8-2730, each controllable electronic record kiosk operator shall
submit to the department within forty-five days after the end of each calendar
quarter a list of all associated controllable electronic record addresses
utilized by each controllable electronic record kiosk, on a form as prescribed
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by the department.
Sec. 4. (1) A controllable electronic record kiosk operator shall
disclose to a customer in a clear, conspicuous, and easily readable manner in
the chosen language of the customer, all relevant terms and conditions
generally associated with the products, services, and activities of the
operator and controllable electronic record.
(2) The controllable electronic record kiosk operator shall require
acknowledgment of receipt of all disclosures required by this section via
confirmation of consent by the customer.
(3) The disclosures shall include a statement, written prominently and in
bold type and provided separately from the other disclosures, warning customers
about the potential for criminals to exploit controllable electronic record
kiosks to commit illicit activity. The controllable electronic record kiosk
operator may tailor the warning language to highlight evolving tactics and
techniques. The warning language shall be similar to the following form:
WARNING: CONSUMER FRAUD OFTEN STARTS WITH CONTACT FROM A STRANGER WHO IS
INITIATING A DISHONEST SCHEME. I UNDERSTAND THAT CRIMINAL ACTIVITY MAY APPEAR
IN MANY FORMS, INCLUDING, BUT NOT LIMITED TO:
(1) Claims of a frozen bank account or credit card;
(2) Fraudulent bank transactions;
(3) Claims of identity theft or job offerings in exchange for payments;
(4) Requests for payments to government agencies or companies;
(5) Requests for disaster relief donations or loans;
(6) Offers to purchase tickets for lotteries, sweepstakes, or drawings for
vehicles;
(7) Prompts to click on desktop pop-ups, such as virus warnings or
communication from alleged familiar merchants; and
(8) Communication from someone impersonating a representative of your bank
or a law enforcement officer.
IF YOU BELIEVE YOU ARE BEING SCAMMED, CALL YOUR LOCAL LAW ENFORCEMENT
AGENCY.
WARNING: TRANSACTIONS CONDUCTED ON THIS CONTROLLABLE ELECTRONIC RECORD
KIOSK ARE IRREVERSIBLE. PROTECT YOURSELF FROM FRAUD. NEVER SEND MONEY TO
SOMEONE YOU DON'T KNOW.
(4) The disclosure shall also include:
(a) The material risks associated with controllable electronic records and
controllable electronic record transactions, including:
(i) The operator's liability for unauthorized controllable electronic
record transactions;
(ii) The customer's liability for unauthorized currency transactions;
(iii) A warning that controllable electronic records are not legal tender,
are not backed or issued by the United States Government, and are not subject
to protections by the Federal Deposit Insurance Corporation, National Credit
Union Administration, or Securities Investor Protection Corporation;
(iv) A warning that there may be delays in the processing and confirmation
of controllable electronic record transactions;
(v) A warning that the value of controllable electronic records is derived
from supply and demand in the global marketplace which can rise or fall
independently of any fiat currency. Holding controllable electronic records
carries exchange rate and other types of risk;
(vi) A warning that a person who accepts a controllable electronic record
as payment today is not required to accept and might not accept controllable
electronic records in the future;
(vii) A warning that the volatility and unpredictability of the price of
controllable electronic records relative to fiat currency may result in a
significant loss over a short period; and
(viii) A warning that any bond or trust maintained by the controllable
electronic record kiosk operator for the benefit of a customer may not cover
all losses;
(b) The amount of the customer's controllable electronic record kiosk
transaction denominated in United States dollars as well as the applicable
controllable electronic records;
(c) Any fees or expenses charged by the controllable electronic record
kiosk operator;
(d) Any applicable exchange rates;
(e) The controllable electronic record transaction daily limit of two
thousand dollars for new customers;
(f) The controllable electronic record transaction daily limit of ten
thousand five hundred dollars for existing customers;
(g) The name, address, and telephone number of the operator of the
controllable electronic record kiosk, the days, time, and means by which a
customer can contact the operator for customer assistance, and any relevant
state or local law enforcement agency or government agency for reporting fraud,
all of which shall be displayed on or at the location of the controllable
electronic record kiosk, or on the first screen of such kiosk; and
(h) Any other disclosures that are customarily given in connection with a
controllable electronic record kiosk transaction.
(5) Upon the completion of a controllable electronic record kiosk
transaction, the controllable electronic record kiosk operator shall provide
the customer with a receipt in the language chosen by such customer. The
receipt shall be physical where possible. If necessary, the controllable
electronic record kiosk operator may provide the receipt in multiple
communications. The receipt shall contain the following information:
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(a) The operator's name and contact information, including a telephone
number to answer questions and register complaints;
(b) Relevant state law enforcement agencies and government agencies for
reporting fraud;
(c) The type, value, date, and precise time of the transaction, the
transaction hash, and each applicable controllable electronic record address;
(d) The name and contact information of the sender of the controllable
electronic record transaction;
(e) The name and contact information of the designated recipient of the
controllable electronic record transaction;
(f) All fees charged;
(g) The exchange rate of the controllable electronic record to United
States dollars;
(h) The operator's liability for nondelivery or delayed delivery;
(i) The operator's refund policy; and
(j) Any additional information the department may require.
Sec. 5. (1) All controllable electronic record kiosk operators shall use
blockchain analytics software to assist in the prevention of sending purchased
controllable electronic records from an operator to a controllable electronic
record wallet known to be affiliated with fraudulent activity at the time of a
transaction. The department may request evidence from any controllable
electronic record kiosk operator of current use of blockchain analytics.
(2) All controllable electronic record kiosk operators shall take
reasonable steps to detect and prevent fraud, including establishing and
maintaining a written antifraud policy. The antifraud policy shall, at a
minimum, include:
(a) The identification and assessment of fraud-related risk areas;
(b) Procedures and controls to protect against identified risks;
(c) Allocation of responsibility for monitoring risks; and
(d) Procedures for the periodic evaluation and revision of the antifraud
procedures, controls, and monitoring mechanisms.
Sec. 6. (1) Each controllable electronic record kiosk operator shall
designate and employ a compliance officer on a full-time basis.
(2) The compliance officer shall be qualified to coordinate and monitor
compliance with the Controllable Electronic Record Fraud Prevention Act and all
other applicable federal and state laws, rules, and regulations.
(3) The compliance officer shall not own more than twenty percent of the
controllable electronic record kiosk operator.
(4) All compliance responsibilities required under federal and state laws,
rules, and regulations shall be completed by full-time employees of the
controllable electronic record kiosk operator or by approved outside vendors
with compliance expertise supervised by full-time employees of such operator.
Sec. 7. (1) If a new customer has been fraudulently induced to engage in
a controllable electronic record kiosk transaction and contacts the
controllable electronic record kiosk operator and a law enforcement agency or
government agency to inform the operator and agency of the fraudulent nature of
the transaction within thirty days after the transaction, then, upon request of
the customer, the operator shall issue a full refund for the fraudulently
induced controllable electronic record transaction, including fees charged in
association with the transaction.
(2) If an existing customer has been fraudulently induced to engage in a
controllable electronic record kiosk transaction and contacts the controllable
electronic record kiosk operator and a law enforcement agency or government
agency to inform the operator and agency of the fraudulent nature of the
transaction within thirty days after the transaction, then, upon request of the
customer, the operator shall issue a full refund for the fees charged in
association with the transaction.
Sec. 8. A controllable electronic record kiosk operator shall not accept
transactions in a day in connection with controllable electronic record kiosk
transactions for a single customer in this state via one or more controllable
electronic record kiosks exceeding:
(1) For new customers, two thousand United States dollars or the
equivalent in controllable electronic records; or
(2) For existing customers, ten thousand five hundred dollars or the
equivalent in controllable electronic records.
Sec. 9. The aggregate fees and charges, directly or indirectly, charged
to a customer related to a single transaction or series of related transactions
involving controllable electronic records effected through a controllable
electronic record kiosk in this state, including any difference between the
price charged to a customer to buy, sell, exchange, swap, or convert
controllable electronic records and the prevailing market value of such
controllable electronic records at the time of such transaction, shall not
exceed eighteen percent of the value of the United States dollars involved in
the transaction or transactions.
Sec. 10. All controllable electronic record kiosk operators performing
business in the state shall, at a minimum, provide live customer service on
Monday through Friday between the hours of 7:00 a.m. and 9:00 p.m. via a toll-
free telephone number. The telephone number shall be displayed on the
controllable electronic record kiosk or the kiosk screens.
Sec. 11. All controllable electronic record kiosk operators performing
business in the state shall, at a minimum, have a dedicated method of contact
for law enforcement to contact the controllable electronic record kiosk
operator. This method of communications shall be monitored at least daily. The
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contact method shall be displayed and available on the controllable electronic
record kiosk operator's website and shall be updated as necessary.
Sec. 12. (1) For purposes of this section, gift certificate or gift card
means a certificate, electronic card, or other prefunded record that (a) is
usable at a single merchant or an affiliated group of merchants that share the
same name, mark, or logo, or is usable at multiple unaffiliated merchants or
service providers, (b) is issued in a specified amount, (c) may or may not be
increased in value or reloaded, (d) is purchased or loaded on a prepaid basis
for the future purchase or delivery of any goods or services, and (e) is
honored upon presentation.
(2) Except as provided in subsection (7) of this section, if any person,
firm, partnership, association, limited liability company, corporation, or
other business entity sells one or more gift certificates or gift cards to a
purchaser, the seller shall provide notice about the potential fraud to the
purchaser.
(3) The Consumer Protection Division of the Office of the Attorney General
shall release model notice language. Entities listed in subsection (2) of this
section may use the model notice or a notice substantially in the same form to
comply with such subsection.
(4) The notice required pursuant to subsection (2) of this section shall
be provided conspicuously where gift certificates or gift cards are displayed
or sold or at point of sale on an electronic payment system screen or in
printed form.
(5) If the Attorney General has cause to believe this section has been
violated, the Attorney General may provide a written citation to the violator.
Any person, firm, partnership, association, limited liability company,
corporation, or other business entity that receives more than one citation may
be subject to a civil penalty of up to two hundred fifty dollars. The first
written citation shall be considered a warning.
(6) Subsection (2) of this section does not apply to a person, firm,
partnership, association, limited liability company, corporation, or other
business entity which sells only gift cards redeemable for goods or services
exclusively by the same person, firm, partnership, association, limited
liability company, corporation, or other business entity.
(7) This section does not apply to a general-use, prepaid card issued by a
financial institution as defined in section 8-101.03 in a predetermined amount,
whether or not that amount can be increased or reloaded, which is usable at
multiple unaffiliated sellers of goods or services, automatic teller machines,
or both.
Sec. 13. Section 29-817, Reissue Revised Statutes of Nebraska, is amended
to read:
29-817 Sections 29-812 to 29-821 do not modify any act inconsistent with
it relating to search warrants, their issuance, and the execution of search
warrants and acts relating to disposition of seized property in circumstances
for which special provision is made. The term property is used in sections
29-812 to 29-821 to include documents, books, papers, and any other tangible
objects, and controllable electronic records as defined in section 8-3003.
Nothing in sections 29-812 to 29-821 shall be construed as restricting or in
any way affecting the constitutional right of any officer to make reasonable
searches and seizures as an incident to a lawful arrest nor to restrict or in
any way affect reasonable searches and seizures authorized or consented to by
the person being searched or in charge of the premises being searched, or in
any other manner or way authorized or permitted to be made under the
Constitution of the United States and the Constitution of the State of
Nebraska.
All search warrants shall be issued with all practicable secrecy and the
complaint, affidavit, or testimony upon which it is based shall not be filed
with the clerk of the court or made public in any way until the warrant is
executed. Whoever discloses, prior to its execution, that a warrant has been
applied for or issued, except so far as may be necessary to its execution,
shall be guilty of a Class III misdemeanor, or he or she may be punished as for
a criminal contempt of court.
Sec. 14. If any section in this act or any part of any section is
declared invalid or unconstitutional, the declaration shall not affect the
validity or constitutionality of the remaining portions.
Sec. 15. Original section 29-817, Reissue Revised Statutes of Nebraska,
is repealed.
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