Proposed bill would crack down on crypto ATM scams

Senator Dick Durbin, D-Ill., ranking member of the Senate Judiciary Committee, wants to put a stop to crypto ATM fraud. Apparently, fraudsters are hoodwinking Americans, primarily older Americans, and lining their pockets with the help of cryptocurrency ATMs.

The Illinois Democrat is not alone. At least three co-sponsors have signed onto the bill. They are Senators Richard Blumenthal, D-Conn., Jack Reed, D-R.I., and Peter Welch, D-Vt.

There are about 30,000 ATMs in the United States where cryptocurrencies can be bought and sold, Senator Durbin noted in a Feb. 25, 2025, speech on the Senate floor. Many of these are located at convenience stores and gas stations. Apparently, a lot of Americans, especially older Americans, are getting conned into using these machines to fund fraudsters’ crypto wallets.

Here’s how the crypto scams work. Fraudsters contact consumers and, using threats, intimidation and fabricated backstories, coerce them into depositing large sums of money into the fraudsters’ crypto wallets using cryptocurrency ATMs. A common ruse is that the victim failed to appear for jury duty and needs to pay a fine to get out of going to jail.

Calling for a crackdown

What makes this a big problem is that cryptocurrencies are unregulated, and crypto transactions are irreversible. In his speech, Sen. Durbin said he wants to crack down on the scams by requiring greater transparency from cryptocurrency ATM operators through passage of legislation known as the Crypto ATM Fraud Prevention Act.

According to data recently released by the Federal Trade Commission, the amount of money Americans reported losing to these types of fraud increased nearly 10 fold between 2020 and 2023—from $12 million to $114 million. In 2023, the FBI’s Internet Crime Complaint Center received nearly 2,700 reports of crypto-ATM frauds from individuals aged 60 and older—more than all other age groups combined, the Senator said.

“It’s past time that we put some common-sense guardrails in place to stop fraud in this largely unregulated industry,” the Senator said. He explained how his proposed legislation would “require crypto ATM operators to warn consumers about scams and take reasonable steps to prevent fraud at their machines. It will also put in place measures to limit the amount that consumers can lose when they do fall victim to scams and will give law enforcement new tools to track down and fight back against criminals,” Durbin added.

Specifically, the legilsation would:

1. Require cryptocurrency ATM operators to provide clear warnings to consumers about the risk of fraud, including warnings about common types of scams, and how consumers should never send money to someone they have never met.

2. Require ATM operators to develop anti-fraud policies. The operators would have to appoint chief compliance officers whose jobs it would be to develop such policies, which then would have to be submitted to the Financial Crimes Enforcement Network. Operators would also be required to provide live customer support during all operating hours.

3. Require crypto ATM operators to register their ATMs with the U.S. Treasury Department and disclose and regularly update locations of all their ATMs. They would also need to appoint a contact person to relevant regulators and enforcement agencies.

4. Require receipts and information sufficient to trace transactions, such as the time, place and amount of the transaction and a link to the operator’s refund policy.

5. Protect new customers – defined as a customer within 14 days of their first transaction, in specific ways, including: transaction limits of $2,000 per day, and $10,000 over 14 days; full refunds for fraudulent transactions reported within 30 days of the fraud occurring; and requiring live, verbal confirmation for any transaction greater than $500.

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