New US bill aims to curb fraud at cryptocurrency ATMs

Illinois Senator Dick Durbin has introduced new legislation to tackle fraud at cryptocurrency cash machines, which have become a growing target for scammers. The Crypto ATM Fraud Prevention Act would impose transaction limits and introduce stronger consumer protections, particularly for older adults vulnerable to financial scams. The bill proposes capping new users at $2,000 per day and $10,000 over 14 days, while also requiring ATM operators to contact first-time users making transactions over $500. Victims who report fraud to the police within 30 days would be entitled to full refunds.

Durbin warned that fraudsters are using intimidation tactics to pressure victims into depositing large sums at cryptocurrency cash machines, often impersonating government officials to demand payments for fictitious fines. Reports of such scams have surged, with the Federal Trade Commission recording losses of $114 million linked to these machines in 2023 alone. A shop owner in Springfield, Illinois, even removed a crypto ATM after witnessing elderly customers making large deposits while seemingly being coerced over the phone.

Similar concerns have led several states, including Minnesota, California, and Vermont, to introduce daily transaction limits on cryptocurrency ATMs. Durbin’s bill would allow state-level regulations to remain in place as long as they are not weaker than federal standards. The proposed law would also require ATM operators to establish fraud prevention policies and submit them to the Financial Crimes Enforcement Network. Companies failing to comply could face daily fines of $10,000.

With cryptocurrency cash machines rapidly expanding across the US, lawmakers are pushing for stricter oversight to combat scams and protect consumers. If passed, Durbin’s bill could establish a nationwide framework for regulating these machines and reducing fraudulent activity.

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