Illinois Senator Dick Durbin has introduced the Crypto ATM Fraud Prevention Act, a new bill aimed at addressing the growing issue of cryptocurrency ATM scams.
The proposed legislation posted on X on 25th of Feb seeks to implement strict transaction limits, capping new users at $2,000 per day and $10,000 over a 14-day period.Â
Additionally, any transaction exceeding $500 would require direct confirmation from the ATM operator before processing.
The bill’s primary goal is to curb fraudulent activities that exploit crypto ATMs, which are frequently used by scammers to deceive vulnerable individuals—particularly the elderly—into making unauthorized payments under false pretenses.
Full Refunds for Victims Reporting Fraud Within 30 Days
One of the bill’s most significant consumer protection measures includes a full refund policy for victims who report fraudulent transactions within 30 days. This provision offers a critical safety net for individuals who are tricked into transferring funds to scammers.
Senator Durbin cited a recent case in New Lennox, where a victim lost $15,000 to fraudsters who impersonated officials and coerced them into using a Bitcoin ATM for payment.
By enforcing transaction limits and requiring additional verification from ATM operators, the bill aims to significantly reduce the occurrence of such high-value scams and safeguard consumers from financial loss.
Also Read: Crypto ATMs To See 32.7% CAGR Growth by 2028 As Per Market Forecasts
Alarming Rise in Crypto ATM Fraud, Particularly Among the Elderly
The urgency behind Senator Durbin’s bill is underscored by alarming statistics on crypto ATM fraud.
According to the Federal Trade Commission (FTC), reported losses from Bitcoin ATM scams in 2023 surpassed $110 million, marking a tenfold increase compared to 2020.
The elderly have been disproportionately affected by these scams, facing a risk nearly three times higher than younger users.
Fraudsters commonly impersonate government officials, law enforcement officers, or bank representatives to pressure victims into making cryptocurrency transactions.
The growing trend highlights the necessity for regulatory action to prevent financial exploitation and enhance consumer protection in the cryptocurrency space.
Crypto ATMs Lack Regulation, Making Them a Target for Scammers
The United States currently has around 29,600 crypto ATMs, yet these machines operate with minimal regulatory oversight, making them prime targets for fraud and financial crime.
Unlike traditional banking systems, cryptocurrency transactions are irreversible, which allows scammers to take advantage of unsuspecting users without fear of refunds or chargebacks.
Many crypto ATMs also do not implement robust Know Your Customer (KYC) protocols, further facilitating illicit activities such as money laundering.
Senator Durbin’s bill seeks to establish stricter regulations, ensuring that cryptocurrency ATM operators adhere to consumer protection standards and implement necessary safeguards against fraudulent transactions.
Crypto ATM Scams Expanding Internationally, Prompting Global Crackdowns
Crypto ATM fraud is not limited to the United States but has become a global issue, prompting regulatory crackdowns worldwide.
In South Carolina, cryptocurrency-related scams including Bitcoin ATM fraud cost residents $3.1 million in losses last year, with elderly victims being the most vulnerable.
In Canada, the Niagara Regional Police have partnered with leading cryptocurrency ATM providers to launch an educational campaign aimed at raising awareness and preventing fraud.
Meanwhile, in Australia, the country’s financial crime watchdog, AUSTRAC, has established a crypto task force to crack down on the misuse of cryptocurrency ATMs.
Additionally, online scams related to cryptocurrency are increasing, with cybersecurity firm Scam Sniffer recently warning about Google phishing ads targeting BNB Chain users.
These developments illustrate the growing urgency for stronger regulatory frameworks worldwide to address the risks associated with cryptocurrency transactions.
Also Read: Crypto Fraud Hits Record $12.4 Billion In 2024 As Pig Butchering Scams Surge