Illinois Senator Dick Durbin has called for action to be taken to help stop crypto ATM fraud as he proposes a new bill.
The legislation, called the Crypto ATM Fraud Prevention Act, would bring in new regulations for the industry.
One of the measures proposed includes providing special protection for consumers during the two weeks after they make their first transaction at a crypto ATM. It’s during this time where customers will be limited to deposits of $2,000 per day and $10,000 in total.
The bill will also require the operators to obtain verbal confirmation via a live phone call for any transaction with a new customer over $500. There will be a responsibility for the operators to provide clear warnings about the risk of fraud too, as well as sharing common types of scams with consumers.
The senator announced the news by first sharing a story from his constituent who late last year received an urgent phone call from someone claiming to be a deputy in the Sheriff’s Office.
He was reportedly told he had missed jury duty and must pay a fine to avoid arrest. From there, Durbin explained how his constituent was then told to deposit $15,000 into a local cryptocurrency ATM machine.
It then became apparent a scammer had been involved and the constituents’ money was gone, with no way to trace the transaction and no way to get the money back.
FTC has previously warned of crypto ATM scams
Amongst other suggestions within the bill, it further states operators will be required to issue refunds to victims of fraud as long as they are notified within 30 days of transaction and have made a report to law enforcement. New customers will get full refunds and all other customers would be entitled to a refund of, at minimum, any fees associated with the transaction.
These cryptocurrency-focused ATMs enable the transaction of Bitcoin and allow for traditional currency to be converted. They’ve caused controversy in the past, as some have become vulnerable to hackers.
In September, 2024, the Federal Trade Commission (FTC) warned that Bitcoin ATMs have become “an easy way” for scammers to steal. At the time, data showed that fraud losses at BTMs were skyrocketing, “increasing nearly tenfold from 2020 to 2023, and topping $65 million in just the first half of 2024.”
In the first half of last year, people 60 and over were found to be more than three times as likely as younger adults to report a loss using a Bitcoin ATM, according to the FTC.
Featured Image: Credit to RB Photo on Flickr
