Illinois Senator Dick Durbin has introduced new legislation aimed at curbing fraud at cryptocurrency ATMs, a growing concern for law enforcement agencies. The Crypto ATM Fraud Prevention Act seeks to impose transaction limits and implement consumer protections to prevent scams, particularly those targeting older adults.
Proposed Regulations and Transaction Limits
According to NBC News, Durbin’s bill would cap daily transactions for new users at $2,000 and impose a $10,000 limit over a 14-day period. Additionally, ATM operators would be required to directly communicate with first-time users attempting transactions over $500 and provide full refunds for fraud victims who file police reports within 30 days.
Scammers Exploiting Crypto ATMs
Senator Durbin emphasized how fraudsters use these machines to coerce victims into depositing large sums under false pretenses.
“As our technology has evolved and become more sophisticated, so have scammers,” Durbin stated. “Nefarious actors are now using intimidation and manipulation to scare Americans, particularly seniors, into dumping their life savings into cryptocurrency ATMs.”
Crypto ATMs have become increasingly common in gas stations and grocery stores nationwide. The Federal Trade Commission (FTC) reported that in 2023 alone, $114 million in losses were linked to cryptocurrency ATM scams. Fraudsters frequently pose as government officials or law enforcement officers, pressuring victims into making fraudulent payments to avoid fictitious fines or legal trouble.
State Regulations and Federal Compliance
Durbin cited a case where a Springfield, Illinois, store owner removed a cryptocurrency ATM after witnessing elderly customers depositing large sums while speaking on their phones, seemingly under duress. Similar concerns have led states such as Minnesota, California, and Vermont to enact daily transaction limits on crypto ATMs.
The proposed bill would allow state regulations to remain in place, provided they are at least as stringent as federal standards. Additionally, it mandates that ATM operators establish fraud prevention policies and submit them to the Financial Crimes Enforcement Network (FinCEN). Companies violating the proposed regulations could face fines of $10,000 per day.
Legislative Outlook
Senator Durbin’s initiative highlights the increasing concern over cryptocurrency-related fraud and the need for stronger consumer protections. While the bill faces legislative hurdles, it aligns with broader efforts to regulate digital assets and protect consumers from financial exploitation.
As cryptocurrency adoption grows, policymakers and industry leaders will continue debating the best ways to balance innovation with security in the digital finance landscape.
