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Key Notes
- Senator Dick Durbin's bill limits new Bitcoin ATM users to $2,000 daily and $10,000 biweekly.
- FTC reports Bitcoin ATM scams hit $114 million in losses since 2020, rising nearly tenfold.
- Violating the bill could cost ATM operators $10,000 per day in Treasury Department fines.
A new bill introduced by US Senator Dick Durbin on February 25 aims to crack down on scams linked to cryptocurrency ATMs, according to CNBC. The Crypto ATM Fraud Prevention Act proposes strict regulations for the machines, which have increasingly become tools for scammers preying on unsuspecting victims.
Under the bill, new users would be restricted from purchasing more than $2,000 per day or $10,000 over a 14-day period at a Bitcoin ATM. Additionally, any transaction exceeding $500 would require direct communication between the user and the company. If a user reports fraud to the police and alerts the operator within 30 days, the company must issue a full refund.
Durbin, who leads a key Senate committee, said action is necessary because scammers are getting smarter with better technology. He explained that criminals, especially those targeting older people, are tricking them into putting their money in those ATMs under false promises. The bill, he argued, would reduce the effectiveness of such scams.
Bitcoin ATM Scams Surge to $114M Since 2020—FTC Reports
According to the Federal Trade Commission (FTC), consumer losses linked to Bitcoin ATM scams have surged at an alarming rate. Reports indicate that since 2020, financial losses from such schemes have expanded nearly tenfold, reaching an astonishing $114 million in 2023.
The popularity of cryptocurrency is rising, mainly because BTC $87 417 24h volatility: 2.7% Market cap: $1.74 T Vol. 24h: $23.44 B value has nearly hit $100,000. That rise has led to a significant increase in scams. Chainalysis, a crypto market research firm, reports scam activity has been growing by about 2% every year.
Bitcoin ATM Scam Tracked Through Blockchain Analysis | Source: Chainalysis
Legislative comes amid growing pressure from consumer advocacy groups demanding federal regulation of the industry. Several states, including Minnesota, California, and Vermont, have already enforced daily transaction caps on Bitcoin ATMs. Under the proposed measure, state laws would take precedence as long as they maintain or exceed federal standards.
The bill has received backing from several financial reform groups, including Americans for Financial Reform. Mark Hays, the group’s associate director for cryptocurrency and financial technology, called the legislation a “good first step” toward controlling fraud in the industry. However, he admitted:
“This bill won’t solve all those problems, but it can help.”
If passed, the bill would grant the Treasury Department the authority to fine Bitcoin ATM operators $10,000 per day for each violation.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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