Top Democrat of the Senate Judiciary Committee Dick Durbin introduced legislation setting rules aimed at reducing fraud at crypto ATMs.
The Crypto ATM Fraud Prevention Act, introduced on Tuesday, sets out requirements for crypto ATM operators, including transaction limits, and providing consumers with clear warnings about potential fraud, according to a one-pager obtained by The Block.
"Mr. President, these measures are common sense guardrails that will prevent countless Americans, particularly senior citizens from losing thousands of dollars that are hard-earned savings to criminal scams," the Illinois Democrat said on the Senate floor on Tuesday.
NBC News earlier reported the announcement of the bill.
Regulatory agencies have scrutinized crypto ATMs over the years over concerns that they are being used in scams. The Federal Trade Commission found that there had been a "massive increase" in consumers' losses to bitcoin ATM scams, according to a report in September 2024. Globally, blockchain intelligence platform TRM Labs found that the "rate of illicit activity at crypto ATMs is double" that of the crypto industry overall.
Durbin's bill would require crypto ATM operators to warn consumers about fraud risk and to have a chief compliance officer create an anti-fraud policy that would be sent to the Financial Crimes Enforcement Network.
The bill would also require transaction limits of $2,000 a day for new customers and full refunds for transactions that are fraudulent if the customer reports within 30 days.
On Tuesday on the Senate floor, Durbin said one of his constituents in a suburb outside of Chicago received a phone call from someone who said they were a deputy in the county's sheriff's office and told the man that he had missed jury duty and that there was a warrant out for his arrest. He was then allegedly told to pay a fine to avoid arrest and was directed to deposit $15,000 to a local crypto ATM machine.
"There was no way to trace the transaction to the scammer and no way to get the money back," Durbin said.
Durbin cited another example — he said a small-town business owner in Springfield, Illinois removed the crypto ATM from the store "after witnessing senior after senior walk in, talking on their phones, looking stressed and depositing huge sums of cash into the machines."
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