South Dakota — Bitcoin and virtual-currency law

Bitcoin Research — Law, Regulation, Markets & Origins (2026)

Legislation

2026-10-09

Document text

Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.

South Dakota — Bitcoin and virtual-currency law

  • Jurisdiction: State of South Dakota (US)
  • Date checked: 2026-10-09 (all statuses below were checked on this date unless another date is given)
  • Regulator: Department of Labor and Regulation, Division of Banking (money transmitters; trust companies)
  • Legislature: 101st Legislative Session ended March 2026; next session January 2027.
  • Saved primary sources: sources/states/sd/ (see sources/states/sd/INDEX.md)

At a glance

Topic South Dakota position Key cite Status (checked 2026-10-09)
Money-transmitter licence for virtual currency Yes. Division of Banking: "virtual currencies, including cryptocurrencies like Bitcoin, are 'monetary value'"; firms transmitting them "would likely be required" to be licensed Memorandum 11-002, 2019-05-25; SDCL ch. 51A-17 In force [S1][S2]
Model law Full MTMA — SDCL §§ 51A-17-52 et seq.; SB 47 (2022) added a rule that licensees transmitting virtual currency hold like-kind virtual currency; SB 43 (2023) and SB 58 (2024) completed the MTMA CSBS Effective 2024-07-01 [S5][S6]
Crypto ATMs / kiosks SB 98 (2026) — kiosk operators must be licensed; $1,000/day and $10,000 per 30 days per user (across kiosks and the licensee's other channels); charges capped at 25%; full refund for fraud reported within 90 days with a police/agency report or sworn statement within 120 days, paid within 72 hours; ID verification with strict liability; block transfers to offshore platforms closed to US users SB 98 (2026), new chapter in Title 51A Enrolled 2026-03-04; in effect (news: "takes effect") (signing date and July 1 effective date unverified) [S3][N1]
Search and seizure Warrants may cover "digital currency" SB 43 (2026) Enacted 2026 [S4][S7]
CBDC State may not accept a CBDC (2024 HB 1161); 2023 UCC bill vetoed by Gov. Noem HB 1161 (2024); HB 1193 (2023) [S7]
Bitcoin reserve HB 1202 (2025) failed; HB 1155 (2026) "permit the state to invest in Bitcoin" never advanced past introduction HB 1155 Died 2026 [S7][S8]
Tax No state personal income tax (general knowledge); no crypto-specific tax rule found — —

1. Money-transmitter licensing of virtual currency

  • Division of Banking Memorandum 11-002, "Virtual Currency Transmission in South Dakota," 2019-05-25 (from Director Bret Afdahl; saved): SDCL 51A-17-4 requires a licence for money transmission, defined in 51A-17-1(13) as receiving "money or monetary value for transmission." "It is the position of the South Dakota Division of Banking that … virtual currencies, including cryptocurrencies like Bitcoin, are 'monetary value.' Accordingly, entities that receive virtual currency … for transmission … would likely be required to obtain and maintain licensure." Licensees must list virtual-currency transmission in NMLS and complete the virtual-currency sections of the quarterly call report. [S1]
  • SDCL chapter 51A-17 "Money Transmission" (index saved) includes § 51A-17-109 "Virtual currency" in the MTMA permissible-investment sections. [S2]
  • MTMA history (CSBS): SB 47 (2022) — control, passive investors, net-worth sliding scale, and "requires licensees transmitting virtual currency to hold like-kind virtual currency of the same volume as that held by the licensee but that is obligated to consumers"; SB 43 (2023) — key individuals, permissible investments incl. letters of credit; SB 58 (2024) — remaining MTMA provisions, effective 2024-07-01. CSBS lists South Dakota as full MTMA, no separate virtual-currency title. [S5][S6]

2. Virtual-currency-specific statutes

Law What it does Status Source
SB 47 (2022) Like-kind reserve rule for virtual-currency licensees (MTMA partial) Enacted 2022 [S6]
HB 1193 (2023) UCC update excluding CBDC from "money" Vetoed by Gov. Kristi Noem (2023) (general knowledge; unverified here) —
HB 1161 (2024) State and subdivisions may not accept a CBDC Enacted 2024 [S7]
HB 1163 (2024) UCC amendments Enacted 2024 [S7]
SB 58 (2024) MTMA completion Effective 2024-07-01 [S6][S7]
HB 1196 (2025) Unclaimed property — virtual currency and notice rules Enacted 2025 [S7]
SB 43 (2026) Search-and-seizure provisions apply to "digital currency" (property includes digital currency; defines it as a digital representation of value on a cryptographically secured ledger) Enrolled 2026-03-04; enacted per NCSL [S4][S7]
SB 98 (2026) Kiosk fraud prevention (section 3) Enrolled 2026-03-04; enacted per NCSL [S3][S7]

3. Crypto ATM / kiosk law

SB 98 (2026), "An Act to prevent virtual currency kiosk fraud" — new chapter in SDCL Title 51A. Enrolled version saved (dated 2026-03-04). [S3]

  • Licence: any operator of a virtual-currency kiosk must be licensed under SDCL ch. 51A-17. Renewal reports must include per-kiosk transaction counts and revenue, BBB complaints, refund requests and outcomes, SAR counts, and number of locations; quarterly kiosk-location reports.
  • Disclosures: material risks (not legal tender; no FDIC/NCUA/SIPC protection; volatility), bold fraud warning (stop if asked to deposit by a supposed friend, government agent, tech-support rep, bill collector or police officer), full fee listing; user must acknowledge — acknowledgment does not waive refund rights; receipts with refund policy.
  • Refunds (§ 7): a licensee "shall issue a full refund" to a fraud victim who notifies it of all fraudulent transactions within 90 days after the last fraud (or after learning of it) and, within 120 days of that contact, submits a police or agency report or a sworn statement; refund (including all charges) due within 72 hours of meeting the conditions.
  • Limits (§ 8): $1,000 per user per day and $10,000 per user per 30 days, applying across kiosks, affiliated kiosks, online portals and over-the-counter sales so they cannot be used to get around the caps.
  • Fee cap (§ 9): total charges (fees plus spread) may not exceed 25% of the transaction.
  • Live customer service 8 a.m.–10 p.m.; dedicated line for law enforcement; written anti-fraud/BSA policy; blockchain analytics that must block transactions to addresses likely tied to fraud, and block transfers to overseas platforms that do not permit US users; government ID and full KYC for every transaction, with strict liability; annual training for kiosk-host staff. [S3]
  • Effective date: news reported the law "takes effect" (headline, likely July 1, 2026 — South Dakota's default effective date) (unverified). [N1]

4. Tax treatment

  • South Dakota has no personal income tax and no corporate income tax (except on banks) — general knowledge, not re-verified. No crypto-specific sales-tax guidance was found (gap).

5. Notable enforcement

  • No South Dakota crypto enforcement action was located in this check (gap).

6. Pending and recently failed bills

The 2026 session is over; nothing is pending.

Bill Subject Outcome Source
HB 1155 (2026) Permit the state to invest in Bitcoin Only the introduced version exists — died [S8]
HB 1301 (2026) Data-center electricity costs and moratorium Only introduced version — died [S8]
HB 1202 (2025) Permit the state to invest in Bitcoin Failed 2025 (committee rejected; news cited volatility concerns) [S7][N2]
HCR 6006 (2025) Urge State Investment Council to invest in Bitcoin Failed 2025 [S7]

7. Contested and fringe claims (flagged, not endorsed)

  • Bitcoin reserve rejection. Supporters argued Bitcoin is a hedge; the House committee rejected HB 1202 in 2025 over volatility, per news ("South Dakota Shoots Down Bitcoin Reserve Bill Over Volatility Concerns"). [N2] Policy dispute.
  • 25% fee cap. South Dakota's cap is among the highest of the state kiosk laws read (compare 12% in North Carolina, 15% in Oklahoma, 18% in Nebraska); consumer advocates argue such caps still permit very high charges, while operators argue costs are high. Comparison is this note's; positions as generally reported (unverified).
  • CBDC fears behind the 2023 veto fight and 2024 ban are speculative — no US CBDC exists. Context.

Sources

Saved full copies are in sources/states/sd/.

  • [S1] South Dakota Division of Banking, Memorandum 11-002, "Virtual Currency Transmission in South Dakota," 2019-05-25. https://dlr.sd.gov/banking/legal/documents/11_002_virtual_currency_transmission_in_sd.pdf — retrieved 2026-10-09 — saved sd-banking-guidance-11-002-virtual-currency-transmission.pdf
  • [S2] South Dakota Legislature, SDCL chapter 51A-17 (Money Transmission) index. https://sdlegislature.gov/api/Statutes/51A-17.html — saved sd-cl-51a-17-money-transmission.html
  • [S3] South Dakota Legislature, SB 98 (2026), enrolled (document 306051, 2026-03-04). https://mylrc.sdlegislature.gov/api/Documents/306051.pdf — saved sd-2026-sb98-virtual-currency-kiosk-fraud-enrolled.pdf; versions list https://sdlegislature.gov/api/Bills/Versions/26656
  • [S4] South Dakota Legislature, SB 43 (2026) versions (Introduced; Enrolled 2026-03-04). https://sdlegislature.gov/api/Bills/Versions/26756 — read 2026-10-09
  • [S5] CSBS, MTMA State Enactments (PDF dated 2026-10-08). https://www.csbs.org/sites/default/files/external-link-files/10.8.26%20MTMA%20State%20Enactments.pdf
  • [S6] CSBS, MTMA legislative update (August 2026). https://www.csbs.org/mtma-legislative-update-august-2026
  • [S7] NCSL, 2024, 2025 and 2026 cryptocurrency legislation pages. https://www.ncsl.org/financial-services/cryptocurrency-digital-or-virtual-currency-and-digital-assets-2026-legislation — read 2026-10-09
  • [S8] South Dakota Legislature API, bill list for session 71 (2026) and versions for HB 1155 (id 26633) and HB 1301 (id 27287). https://sdlegislature.gov/api/Bills/Session/71 ; https://sdlegislature.gov/api/Bills/Versions/26633 — read 2026-10-09
  • [N1] MSN, "Aimed at scammers, new cryptocurrency kiosk law takes effect in South Dakota" and "New SD law aims to combat virtual currency kiosk fraud" (headlines only). https://www.msn.com/en-us/money/general/new-sd-law-aims-to-combat-virtual-currency-kiosk-fraud/ar-AA26Zs9z
  • [N2] Benzinga, "South Dakota Shoots Down Bitcoin Reserve Bill Over Volatility Concerns," February 2025 (headline only). https://www.benzinga.com/markets/cryptocurrency/25/02/43934284/south-dakota-shoots-down-bitcoin-reserve-bill