a bill in the USA to reduce fraud

Dick Durbin, Democratic senator from Illinois, has introduced his bill to reduce Bitcoin ATM fraud in the USA. This legislation proposes a “special protection” for two weeks after the first use of a crypto ATM. 

Bitcoin ATM and Senator Durbin’s bill proposal to reduce crypto fraud

Dick Durbin, Democratic senator from Illinois, has introduced the his new bill to reduce crypto fraud, called “Crypto ATM Fraud Prevention Act”. 

The new bill is a prevention of fraud at crypto ATMs, aiming to impose “common-sense barriers” against scams, especially targeting the elderly. 

Durbin recounted the story of one of his constituents who had been scammed by someone claiming that the authorities had issued an arrest warrant against him. Essentially, the scammer had persuaded the man to “pay the fine” with a deposit of $15,000 at a cryptocurrency ATM, to avoid jail.

Not only that, the senator added that this kind of fraud involving the 30,000 crypto ATMs in the USA continues to have an alarming trend. 

Bitcoin ATM: the law proposes more intervention by the operators

The peculiarity of the new bill signed by Durbin on Bitcoin ATMs, requires crypto ATM operators to intervene. 

“This law will require cryptocurrency ATM operators to warn consumers about scams and to take reasonable measures to prevent fraud at their machines. It will also implement measures to limit the amount consumers lose when they fall victim to scams and will provide law enforcement with new tools to track and combat criminals.”

In practice, the Crypto ATM Fraud Prevention Act proposes a “special protection” for two weeks after the first use of a crypto ATM. 

Not only that, ATMs should always limit a customer’s deposits to 2,000 dollars per day or 10,000 dollars in total, and verbally confirm any deposit over 500 dollars by new customers. 

According to Durban, crypto ATM operators should also provide full refunds to fraud victims in certain circumstances. 

The dizzying increase of scams with crypto ATMs

Last September 2024, the Federal Trade Commission (FTC) had reported a sharp increase in scams involving Bitcoin ATMs and crypto ATMs.

In numbers, the FTC has collected testimonies from consumers who reported having lost 110 million dollars in 2023. This figure is ten times larger than what was reported in 2020. 

Not only that, in the first months of 2024, then, the losses due to scams through crypto ATMs had already exceeded 65 million dollars. Here, the most affected victims turned out to be people over the age of 60.