US Senator Introduces Bill to Crack Down on Crypto ATM Fraud

YEREVAN (CoinChapter.com) — Senator Dick Durbin, a Democrat from Illinois, has introduced the Crypto ATM Fraud Prevention Act to address rising fraud cases involving crypto ATMs in the United States. Speaking on Feb. 25 from the Senate floor, Durbin described how a constituent was scammed out of $15,000 by a fraudster posing as law enforcement. The scammer falsely claimed there was a warrant for the victim’s arrest and demanded payment through a crypto ATM to avoid jail time.

Durbin said this case is part of a widespread trend of crypto ATM fraud, with many victims, particularly senior citizens, falling for similar scams. He emphasized the urgency of introducing new consumer protection measures for the 30,000 crypto ATMs operating across the country.

Crypto ATM Operators Could Face Stricter Requirements

The proposed law would introduce several new requirements for crypto ATM operators. Durbin explained that operators would need to provide clear fraud warnings to consumers at ATM locations, ensuring users are aware of potential scams. The bill would also impose transaction limits, restricting daily deposits to $2,000 and capping total deposits at $10,000 for each user.

Durbin said the legislation includes a two-week protection period for first-time users. During this time, transactions over $500 would require verbal confirmation to prevent impulsive payments linked to scams. He also noted that in certain cases, victims of fraud could receive full refunds, holding crypto ATM operators accountable for security at their machines.

“This bill will require crypto ATM operators to warn consumers about scams and take reasonable steps to prevent fraud at their machines,”

said Senator Durbin.

“It will also put in place measures to limit the amount that consumers lose when they do fall victim to scams, give law enforcement new tools to track down and fight back against criminals.”

Crypto ATM Fraud Targets Senior Citizens

The FBI reported that crypto fraud cost Americans over $5 billion in 2023, many cases involving senior citizens. Scammers frequently impersonate law enforcement or government officials. They tell victims that they face legal trouble unless they make immediate payments. In the past, fraudsters relied on gift cards. Now, they have turned to crypto ATMs as a method for collecting money.

Durbin described this shift as an escalating financial threat, requiring stronger consumer protection measures. He said the Crypto ATM Fraud Prevention Act would help authorities identify and prosecute those responsible for these scams.

Uncertain Future for New Bill

Notably, The Crypto ATM Fraud Prevention Act is one of the first crypto-related bills introduced in the 119th session of Congress. Lawmakers are also debating stablecoin regulations at the same time.

Republicans control Congress, which makes the bill’s future uncertain. It is unclear if it will get enough support. The bill must pass both the Senate and the House before becoming law.

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