Illinois Senator Dick Durbin has unveiled new legislation designed to combat escalating fraud at cryptocurrency ATMs, a pressing concern for law enforcement.
The Crypto ATM Fraud Prevention Act seeks to impose strict transaction limits and enhance consumer protections, particularly for older adults who are often targeted by scammers.
The proposed legislation would limit new users to $2,000 in daily transactions and $10,000 over a 14-day span. Additionally, ATM operators would be required to communicate directly with first-time users attempting transactions exceeding $500 and to provide comprehensive refunds for fraud victims who report incidents to the police within 30 days.
Rising Threat of Scammers
Senator Durbin highlighted the tactics used by scammers, who pressure victims into making large cash deposits based on deceptive claims.
“As technology advances, so do the schemes of scammers,” Durbin stated. “These malicious individuals are employing intimidation to manipulate Americans, especially seniors, into investing their life savings in cryptocurrency ATMs.”
Coinciding with the rapid proliferation of cryptocurrency ATMs in locations such as gas stations and grocery stores, law enforcement is noticing a troubling rise in scams. In 2023, the Federal Trade Commission reported losses of $114 million attributed to these machines.
Fraudsters frequently impersonate government officials or law enforcement agents, pressuring victims to make payments to evade fictitious fines or legal repercussions.
Durbin cited an incident involving a cryptocurrency ATM in a Springfield, Illinois store, where numerous elderly patrons were observed depositing large amounts while seemingly coerced via phone conversations.
This alarming trend has prompted several states, including Minnesota, California, and Vermont, to establish daily transaction limits on cryptocurrency ATMs. Durbin’s proposal would allow states to maintain regulations as long as they are not less strict than federal guidelines.
Furthermore, the bill mandates that ATM operators implement comprehensive fraud prevention policies and submit these to the Financial Crimes Enforcement Network. Violations of the proposed regulations could result in fines of up to $10,000 per day.
