Senator Senator Dick Durbin Proposes Bill to Combat Cryptocurrency ATM Fraud Proposes Bill to Combat Cryptocurrency ATM Fraud
Senator Dick Durbin, a Democrat and leader of the Senate Judiciary Committee, has introduced a new bill aimed at reducing fraud involving cryptocurrency ATMs. Dubbed the Cryptocurrency ATM Fraud Prevention Act, the bill seeks to protect consumers, especially seniors, from common scams involving the use of ATMs to purchase cryptocurrency.
Cryptocurrency ATM Fraud Risks
Regulators have expressed concern about the rise of cryptocurrency ATM scams in recent years. According to a September 2024 report by the Federal Trade Commission, the number of consumers being scammed using bitcoin ATMs has increased significantly. In fact, a study from TRM Labs found that illegal activity at cryptocurrency ATMs is twice as high as the average for the cryptocurrency industry as a whole.
Durbin said the impetus for introducing the bill came from a recent spate of fraud cases in which many elderly victims were tricked into depositing large sums of money into cryptocurrency ATMs. In one case in Springfield, Illinois, a business owner decided to remove a cryptocurrency ATM from his store after witnessing many elderly people coming in, looking stressed, talking on their phones, and depositing large amounts of cash into the machines.
Fraud Prevention Measures
The Cryptocurrency ATM Fraud Prevention Bill would impose new requirements on cryptocurrency ATM operators, including:
- Limiting transactions to $2,000 per day for new customers.
- Warning consumers about potential fraud risks.
- Require compliance officers to develop an anti-fraud policy and report it to the Financial Crimes Enforcement Network (FinCEN).
Ensure full refunds for fraudulent transactions if reported within 30 days.
Durbin stressed that these measures would help prevent thousands of Americans, especially seniors, from losing large sums of their savings to scammers.
Typical Fraud Story
On the Senate floor on Tuesday, Durbin shared a story about a voter in a Chicago suburb who was tricked into depositing $15,000 into a cryptocurrency ATM. The victim received a call from someone claiming to be a sheriff's deputy, claiming he had missed jury duty and had a warrant for his arrest. To avoid arrest, he was asked to pay the fine via cryptocurrency ATM. Durbin stressed that there was no way to trace the transaction and the victim could not get his money back.
Durbin’s bill aims to reduce such situations and provide better protection for consumers when using cryptocurrency ATMs. Senator Durbin believes that these regulations are necessary to protect vulnerable people from the sophisticated scams that are increasingly prevalent in the cryptocurrency industry.
