U.S. Senator Dick Durbin from Illinois has announced a new bill on February 25 aimed at combating the alarming rise in fraud cases linked to cryptocurrency ATMs across the United States. Senator Durbin shared a harrowing account of a constituent who fell victim to a scammer impersonating a law enforcement officer.
This scam involved the victim being coerced into depositing $15,000 into a crypto ATM under the threat of arrest. Durbin characterized this incident as emblematic of a 'troubling trend' involving crypto ATM scams, which have proliferated as approximately 30,000 such machines are now operational nationwide. In response to this growing concern, Durbin introduced the 'Crypto ATM Scam Prevention Act', a piece of legislation designed to implement 'common-sense protections' for the operation of cryptocurrency ATMs.
The proposed measures would mandate that operators inform consumers about potential scams, while also taking necessary precautions to prevent fraud at these machines. Furthermore, the legislation seeks to mitigate consumer losses during such scam incidents and equip law enforcement with enhanced tools to tackle fraudulent activities. Despite the use of cryptocurrency, the methods employed in these scams mirror traditional tactics where criminals threaten victims over the phone, coercing them to purchase gift cards and divulge redemption codes under the pretense of severe legal repercussions.
FBI data suggests that crypto scams in the U.S. led to staggering losses exceeding $5 billion in 2023, with a significant number of victims being elderly individuals. The proposal from Senator Durbin also outlines a two-week 'special protection period' for first-time users of crypto ATMs, aiming to give them extra time to familiarize themselves with the risks involved.
Additionally, the bill stipulates that operators of crypto ATMs must impose a cap on daily deposits of $2,000 for individual users and require verbal confirmation for any first-time deposits surpassing $500. In cases where fraud occurs, the bill mandates that operators are obligated to provide full refunds to victims under specific conditions. This bill stands as one of the pioneering legislative efforts related to cryptocurrency introduced in the 119th U.S.
Congress, following earlier proposals in both the House of Representatives and the Senate surrounding the regulation of stablecoins. As this proposal advances, it remains uncertain whether it will attract sufficient bipartisan support within the Republican-controlled Congress, ultimately paving the way for it to be signed into law by U.S.
President Donald Trump..