A Democrat senator from Illinois named Dick Durbin has put forth legislation to lower the amount of crypto ATM fraud in the US.
On February 25, Senator Durbin told a story from the Senate floor about a constituent duped by someone who said that the police had issued an arrest warrant for him. According to the scammer, the man could avoid jail by “paying the fine” with a $15,000 deposit at a cryptocurrency ATM.
Crypto ATM Fraud On The Rise
With over 30,000 ATMs in the US, the scam was part of an “alarming trend of crypto ATM fraud,” according to the senator from Illinois. He introduced the Crypto ATM Fraud Prevention Act to put some “common sense guard” against fraud, mainly against senior citizens.
Senator Durbin stated, “This bill will require crypto ATM operators to take reasonable steps to prevent fraud at their machines and warn consumers about scams.” “It will also provide law enforcement with new tools to find and combat criminals, and it will implement measures to limit the amount that consumers lose when they fall victim to scams.”
Although it uses cryptocurrency, the scam is a variant criminals have used for years. Typically, the scam involves phony threats of legal repercussions unless the victim buys gift cards and provides the redemption code. The FBI reports that in 2023, Americans lost over $5 billion due to cryptocurrency fraud, with many scams focusing on elderly victims.
Senator Durbin claims that the bill would provide “special protection” for two weeks following a user’s first use of a cryptocurrency ATM. The ATMs would have to verbally verify any deposit exceeding $500 from new users and restrict deposits from a single user to $2,000 per day or $10,000 overall. Under some conditions, operators would also be required to give fraud victims complete refunds.
After competing proposals to regulate stablecoins in the House and Senate, Senator Durbin’s bill was one of the first crypto-focused pieces of legislation introduced in the 119th session of Congress. It is uncertain if any bill supported by Democrats will garner enough votes to pass the Republican-controlled Congress and be signed into law by President Donald Trump.
