Indiana Lawmakers Greenlight Crypto Pension Investments While Tightening ATM Restrictions
Indiana just placed a major bet on digital assets—with one hand tied behind its back.
The Pension Play
State lawmakers advanced legislation that would allow public pension funds to allocate a portion of their massive portfolios into cryptocurrencies. It’s a landmark move, signaling institutional confidence is seeping into the heartland’s retirement systems. Forget just hedge funds and family offices—now the guardians of public workers' futures are eyeing the crypto markets.
The ATM Crackdown
But the same legislative push brings heavy new restrictions on crypto ATMs. The aim? Curbing fraud and imposing stricter identity checks. It’s a classic regulatory tango—opening one door for sophisticated investors while slamming another for casual users. The message is clear: crypto is for responsible, vetted capital, not your anonymous Saturday night Bitcoin purchase.
The Balancing Act
This dual approach reveals the tightrope states are walking. Embrace innovation and potential returns, but shield consumers from the sector's wilder excesses. It’s a pragmatic, if somewhat schizophrenic, strategy for bringing digital assets into the mainstream financial fold—proving once again that when Wall Street finally shows up, it brings its own rulebook. And maybe a cynical jab at the old guard: because nothing says 'future-proofing' like letting pension funds chase the same volatility that keeps traditional finance guys up at night.
Indiana’s Public Retirement System testified as neutral on the bill.
House Bill 1042 WOULD allow members of certain public pension plans to choose self-directed brokerage accounts offering crypto investment options. The state would also be able to invest the plan assets into crypto exchange-traded funds.
Participants in defined benefit plans don’t get to decide how the investments are managed. Only the state gets to decide. However, those with defined contribution plans would be able to take advantage of the changes.
The bill would also limit how state and local governments can interfere with crypto activities. Besides the Indiana Department of Financial Institutions, state agencies would not be allowed to ban digital mining businesses, restrict crypto payments for legal services, or take custody of digital wallets using certain technologies.
The Indiana Public Retirement System testified as neutral on the bill. “We’ve worked with the House to get it to the current FORM and (we’re) more or less happy with it,” said Tom Perkins, the investment counsel and director of investment stewardship.
Additionally, local governments would also be barred from stopping crypto mining companies, such as data centers, from operating in industrial zones, and from preventing residents from mining crypto in their own homes.
As reported by Cryptopolitan, SEC Chair Paul Atkins suggested a more open stance toward the inclusion of crypto in 401(k) retirement accounts. According to him, conditions are now in place and that “the time is right to allow” such investments.
Bill to eliminate crypto ATMs, say operators
Indiana recorded 35 crypto ATM scam cases last year, totaling more than $400,000 in losses. This has prompted a bill to regulate the virtual currency kiosks commonly referred to as crypto ATMs.
Rep. Wendy McNamara, the bill’s author, stated, “These ATMs have become a powerful tool for scammers to prey on seniors and people in crisis […]These victims often believe they’re paying a bill, helping a loved one or protecting their savings — when, in reality, they’re being manipulated into sending money to criminals.”
Evansville has passed its own ordinance requiring signage, receipts, and a phone number on the machine, but seeks statewide legislation.
The measure will require kiosk operators to obtain a money-transmitter license, obtain permission to install the machines from the Department of Financial Institutions, comply with data reporting requirements, and more.
The bill would also require operators to refund the full payment amount, including transaction fees, to victims of scams. They would have to verify a customer’s identity before accepting payment and can’t charge transaction fees exceeding 10% of the transaction’s value. The bill also limits how much new and existing users can transact over 24-hour and month-long periods.
However, crypto ATM operators said the measure would drive them out of business in Indiana. Larry Lipka, CoinFlip’s general counsel, told lawmakers the 10% cap was too low. The company’s average transaction fee rate across its 100-plus Indiana kiosks is between 17% and 19%.
“Why should someone using a product for two months, two years, or five years be limited in the amount that they want to buy? That is anti-American and anti-freedom,” he added.
The company also opposed the scam total-refund provisions and sought refunds of only the transaction fee for new customers for a limited period of time.
Larry Lipka said that federal law requires refunds only for unauthorized transactions, such as credit card fraud or bank account hacking. But scam victims have authorized their losses, even if they were forced to do so.
Sharpen your strategy with mentorship + daily ideas - 30 days free access to our trading program
