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A California Superior Court has upheld the Digital Financial Assets Law, which includes a $1,000 daily withdrawal limit for cryptocurrency ATMs. The law also requires crypto ATM operators to obtain licenses and comply with fee limits and new disclosures.
California Court Upholds Bitcoin ATM Withdrawal Limit
The California Department of Financial Protection and Innovation (DFPI) announced on Wednesday that the Superior Court for Los Angeles County has confirmed the consumer protections outlined in the Digital Financial Assets Law (DFAL) for users of cryptocurrency kiosks, commonly known as bitcoin ATMs.
The Alliance for the Fair Access to Cryptocurrency Terminals filed a lawsuit in January, challenging the DFAL’s $1,000 per customer daily withdrawal limit at these kiosks, arguing it was unreasonable and beyond the Legislature’s authority. Noting that the court ruling aligns with the DFPI’s stance, the announcement states:
The court found that the cap on daily transactions at crypto kiosks was a reasonable method for limiting fraud.
DFPI Commissioner Clothilde Hewlett highlighted the importance of these regulations, stating: “The law’s common-sense restrictions, including a $1,000 daily limit at crypto kiosks, protect consumers from fraudulent transactions and limit the use of kiosks for illicit purposes.”
Hewlett further emphasized that “the Department will continue implementing this important legislation, which will strengthen responsible innovation in the state’s crypto industry and protect Californians.”
The DFPI’s announcement also notes:
In addition to the daily limit at issue in the now-dismissed lawsuit, DFAL protects users of crypto kiosks by limiting fees operators may charge and mandating new disclosures. Kiosk operators in California will also need to apply for a DFAL license.
Signed into law in October 2023, the DFAL establishes a regulatory framework that requires digital financial asset businesses to obtain licenses and comply with various regulations starting July 2025.
What do you think about the court’s decision to uphold the daily withdrawal limit for cryptocurrency ATMs in California? Let us know in the comments section below.