Illinois Sen. Dick Durbin has introduced the Crypto ATM Fraud Prevention Act, which aims to regulate the crypto ATM industry in response to an increase in scams, particularly targeting older adults. The bill sets limits on daily and 14-day spending, requires direct interactions with customers making large transactions, and mandates full refunds for victims who file police reports within 30 days. The legislation aims to protect consumers from scams perpetrated through bitcoin ATMs, which have resulted in at least $114 million in losses reported to the FTC in 2023.
Durbin’s bill has garnered support from consumer advocacy groups like Americans for Financial Reform, who see it as a necessary first step in addressing fraudulent practices within the crypto industry that have been exploited by scammers. The industry has seen rapid growth, with crypto ATMs popping up in gas stations and grocery stores across the country, creating regulatory gaps that have allowed scams to proliferate. The legislation would also allow the Treasury Department to impose fines on companies that violate the regulations.
Some of the largest bitcoin ATM operators in the U.S., including Bitcoin Depot, CoinFlip, and Athena Bitcoin, have not yet commented on the proposed legislation. Advocates argue that having direct interactions with customer service representatives at the machines could help prevent victims from falling for scams, as seen with cases like Eric Reisman, a retired teacher who lost $7,000 to a jury duty scam perpetrated through a bitcoin ATM. The bill also aims to align state regulations with federal standards to ensure consistent protection for consumers.
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