U.S. lawmakers introduce the Crypto ATM Fraud Prevention Act to combat rising scams. The bill mandates fraud warnings, transaction limits, and refunds for victims while holding crypto ATM operators accountable.
New Bill Proposes Fraud Warnings, Transaction Limits, and Refunds for Victims
U.S. lawmakers have introduced the Crypto ATM Fraud Prevention Act to combat the rising number of cryptocurrency kiosk scams that have disproportionately affected older Americans. The bill, announced on February 26, 2025, proposes new consumer protection measures, including fraud warnings, transaction limits, and mandatory refunds for scam victims.
Stronger Oversight for Crypto Kiosks
The legislation, introduced by Senator Jack Reed (D-RI) and co-sponsored by Senators Dick Durbin (D-IL), Richard Blumenthal (D-CT), and Peter Welch (D-VT), seeks to regulate cryptocurrency ATMs by requiring operators to:
- Implement comprehensive anti-fraud policies and submit them to the Financial Crimes Enforcement Network (FinCEN)
- Appoint a chief compliance officer to oversee fraud prevention
- Register with the U.S. Treasury Department and disclose ATM locations
Senator Reed emphasized the need for stricter oversight, stating that crypto kiosks have become “payment portals for scammers.” He called on ATM operators to take responsibility for ensuring their machines are not used to exploit vulnerable individuals or facilitate money laundering.
Consumer Protection Measures
- To prevent fraud, the bill introduces specific protections for first-time users:
- Transaction limits of $2,000 per day and $10,000 over the first 14 days
- Mandatory refunds for fraudulent transactions reported within 30 days
- Live, verbal confirmation for transactions exceeding $500
These measures aim to reduce fraud risks, protect new users, and improve accountability among crypto ATM operators.
Growing Concerns Over Crypto ATM Scams
The legislation follows a sharp rise in fraud linked to cryptocurrency ATMs. According to the Federal Trade Commission (FTC), reported losses from these scams increased from $12 million in 2020 to $114 million in 2023, with an additional $65 million lost in the first half of 2024. The FBI’s Internet Crime Complaint Center also reported nearly 2,700 fraud cases involving victims aged 60 and older last year.
Support from Consumer Advocacy Groups
The bill has gained backing from organizations such as the National Consumers League, Public Citizen, and Americans for Financial Reform, all of which support stronger regulations to protect consumers from crypto-related fraud.
“This is a positive first step towards stopping the surge in crypto kiosk scams and cracking down on criminals,” said Senator Durbin. “We must also continue educating vulnerable populations, especially older Americans, about how to recognize and avoid crypto scams.”
Steps to Curb the Scams
The proposed legislation would establish a federal standard to replace the current state-by-state regulations, while allowing states to impose stricter rules if needed. If passed, the bill could significantly impact the crypto ATM industry, requiring operators to strengthen security and transparency.
As lawmakers push for increased oversight, the future of crypto ATM regulation remains a key issue in the fight against digital asset fraud.
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