Senator Richard J. Durbin of Illinois, a top Democrat on the Senate Judiciary Committee, has introduced legislation aimed at curbing fraud associated with cryptocurrency automated teller machines (ATMs).
The proposed “Crypto ATM Fraud Prevention Act,” unveiled Tuesday, seeks to impose a series of regulatory guardrails on the burgeoning industry, mandating transaction limits, clear consumer warnings, and enhanced compliance measures.
The bill arrives amid a surge in reported scams, particularly those targeting senior citizens, who are often lured into depositing substantial sums of cash into the machines under false pretenses.
“These measures are common sense guardrails that will prevent countless Americans, particularly senior citizens, from losing thousands of dollars of hard-earned savings to criminal scams,” Durbin declared on the Senate floor.
The legislation would require crypto ATM operators to implement a daily transaction limit of $2,000 for new customers as a way to mitigate the impact of large-scale scams.
It would also mandate that operators provide prominent warnings about the risks of fraud and establish a chief compliance officer to oversee anti-fraud policies. These policies would be subject to review by the Financial Crimes Enforcement Network, a bureau of the Treasury Department.
Bill Comes Amid Bitcoin ATM Scam Surge
A September 2024 report by the Federal Trade Commission has revealed a “massive increase” in consumer losses related to Bitcoin ATM scams. These scams have grown as did the number of crypto ATMs, with 137 operators now running 4,059 of these machines according to Coin ATM Radar.
Durbin cited several stark examples of the Bitcoin scams plaguing citizens. In one instance, a resident of a Chicago suburb was duped into depositing $15,000 into a crypto ATM after being falsely told he faced arrest for missing jury duty.
Another anecdote involved a small-town business owner in Springfield, Illinois, who removed a crypto ATM from his store after witnessing a stream of elderly individuals, seemingly under duress, depositing large sums of cash.
The proposed legislation also includes provisions for full refunds in cases of fraudulent transactions reported within 30 days. This measure aims to provide a degree of recourse for victims who often find themselves with little to no means of recovering their lost funds.
