Elderly and first-time crypto ATM users get safeguards in bill before US Senate

A bill to protect consumers using cryptocurrency automatic teller machines (ATMs) in the United States has been introduced in the Senate. The Crypto ATM Fraud Prevention Act bill was sponsored by Illinois Senator Dick Durbin and three other Democrats.

Durbin, who has a record as a staunch opponent of cryptocurrency, introduced the bill on the Senate floor on Feb. 25. “Mr. President, it is past time we placed some common-sense guardrails on the largely unregulated industry,” he said.

The bill gives ATM operators greater liability

Durbin ran through the main provisions of the bill while introducing it. No text of the bill is available at the time of writing. In general, it provides greater customer protection against scams and broadens the responsibilities of ATM operators for scam prevention.

Specifically, crypto ATM operators would be required to warn customers about scams and take other reasonable measures to prevent fraud at their machines. It also would require them to use analytics to detect fraud. Durbin noted that some crypto ATM operators already do that.

Durbin recounted how the elderly and newcomers to crypto are often the victims of scams involving ATMs. Several of the bill’s provisions are aimed at protecting these segments of the population.

New customers would have a two-week window when they are limited to $2,000 a day in deposits and a $10,000 total. For new customers’ transactions over $500, the crypto ATM operator will be required to confirm the transaction with a live telephone call. The phone call is intended to confound scammers, who often keep their victims on the phone through the entire fraudulent transaction.

All customers would be eligible for a full refund for a fraudulent transaction if they inform the police within 30 days. All crypto ATMs would be required to provide a paper receipt for transactions with information useful to law enforcement.

Crypto ATM fraud is on many radars

Durbin and six other Democratic senators sent a letter to the ten leading crypto ATM providers in September asking about their efforts to combat fraud.

There are over 31,000 crypto ATMs in the United States. Federal Trade Commission data show that fraud at crypto ATMs is increasing rapidly. Consumers lost $100 million in crypto ATM fraud in 2023 and $65 million in the first half of 2024. The median loss in 2024 was $10,000. People over 60 were three times more likely to fall victim to such scams.

At least 15 states have proposed legislation to protect consumers from crypto ATM fraud. In New Jersey, a complete ban on crypto ATMs has been proposed. 

Legislation to combat fraud at crypto ATMs has been advanced in several states this year alone. They include Arizona, Rhode Island and Iowa. The attorney general of Pennsylvania issued a warning about crypto ATMs the same day Durbin introduced his bill. The attorney general of Delaware issued a similar warning in January.

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