Illinois Sen. Dick Durbin introduced the Crypto ATM Fraud Prevention Act to regulate the crypto ATM industry. The bill aims to prevent scams where victims lose money through these machines by limiting daily and 14-day spending amounts for new users, requiring companies to speak directly with customers making large transactions, and mandating full refunds for victims who file a police report within 30 days. The bill comes in response to an increase in scams involving bitcoin ATMs, with at least $114 million in losses reported in 2023, particularly targeting vulnerable populations like older adults.
The legislation would defer to state regulations if they are not in conflict or less stringent. Durbin led an inquiry into how the country’s largest bitcoin ATM operators protect elderly users from scams, with most setting daily transaction limits around $25,000. Some companies have expressed support for the bill, emphasizing the importance of protecting consumers while preserving their access to digital currencies.
Consumer watchdog groups have endorsed the legislation as a positive step towards addressing fraudulent practices in the crypto industry. The bill could result in fines for companies that violate the regulations, potentially deterring scammers from exploiting vulnerable individuals. While the bill may not solve all issues in the crypto industry, it is viewed as a crucial first step in combating fraud and protecting consumers.
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