Arizona Governor Katie Hobbs vetoed two major cryptocurrency bills on Monday, citing market volatility risks, while approving new consumer protections for crypto ATMs in a mixed verdict for digital asset regulation.
The most significant rejection was Senate Bill 1373 (SB1373), which proposed creating a state-run Digital Assets Strategic Reserve Fund to manage crypto obtained through seizures or appropriations. The bill would have allowed the state treasurer to invest up to 10% of the fund’s deposits annually.
In her veto letter, Hobbs pointed to the “ongoing volatility” in crypto markets as a key concern. “This legislation would unnecessarily expose taxpayer funds to unacceptable risk,” she wrote. The decision follows her May 7 signing of House Bill 2749 (HB2749), a more limited measure allowing Arizona to hold crypto acquired through airdrops, staking rewards, and interest, but without direct state investment.
Dennis Porter, CEO of the Satoshi Action Fund, noted Hobbs favored HB2749 because it was “budget-neutral” and avoided speculative exposure.
One Crypto Win: ATM Rules
The governor did approve House Bill 2387 (HB2387), imposing strict rules on crypto kiosks. Operators must now:
- Provide fraud warnings and 24/7 support
- Issue detailed transaction receipts
- Cap daily buys at 2,000 (new users) and 10,500 (existing users)
- Use blockchain analytics to block scam wallets
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