U.S. Senator Proposes Bill To Combat Crypto ATM Scams

According to Odaily, U.S. Senator Dick Durbin from Illinois announced a new bill on February 25 aimed at reducing fraud cases involving cryptocurrency ATMs in the United States. Durbin shared a story of a constituent who was coerced by a scammer posing as a law enforcement officer to deposit $15,000 into a crypto ATM to avoid arrest. He described this as part of a "troubling trend" of crypto ATM scams, with approximately 30,000 such machines across the country. To combat scams, particularly those targeting the elderly, Durbin introduced the "Crypto ATM Scam Prevention Act," which seeks to implement "common-sense protections" for crypto ATM operations. The proposed legislation would require operators to warn consumers about potential scams and take reasonable measures to prevent fraud at the machines. It also aims to limit consumer losses in scam situations and provide law enforcement with new tools to combat criminals. Despite utilizing cryptocurrency, this scam method is essentially a long-standing tactic where criminals threaten victims over the phone, demanding they purchase gift cards and provide redemption codes under the threat of false legal consequences. According to FBI data, crypto scams resulted in over $5 billion in losses in the U.S. in 2023, with many victims being elderly. Durbin's proposal includes a two-week "special protection period" for first-time crypto ATM users. Additionally, it mandates that crypto ATMs limit daily deposits to $2,000 per user and require verbal confirmation for first-time deposits exceeding $500. In cases of fraud, operators would be required to offer full refunds to victims under specific circumstances. This bill is one of the first crypto-related legislative proposals introduced in the 119th U.S. Congress, following previous proposals in the House and Senate regarding stablecoin regulation. It remains uncertain whether the bill will garner enough support in the Republican-controlled Congress to be signed into law by U.S. President Donald Trump.