tl;dr
Illinois Senator Dick Durbin has introduced the Crypto ATM Fraud Prevention Act to address the rising fraud associated with crypto ATMs, which have resulted in substantial financial losses, particularly for elderly victims. The proposed legislation aims to impose strict transaction limits and requir...
Illinois Senator Dick Durbin has introduced the Crypto ATM Fraud Prevention Act to address the rising fraud associated with crypto ATMs, which have resulted in substantial financial losses, particularly for elderly victims. The proposed legislation aims to impose strict transaction limits and require companies to offer full refunds to fraud victims who report within 30 days. It also includes measures to prevent new users from spending more than $2,000 daily or $10,000 within 14 days, and mandates direct operator contact for transactions over $500.
The bill follows a significant increase in reported losses to crypto ATM scams, particularly targeting older adults, with the Federal Trade Commission revealing a nearly tenfold increase in reported losses since 2020, totaling over $110 million in 2023. The rise in scams coincides with the proliferation of crypto ATMs in the U.S., which now number nearly 29,642 machines. Additionally, the industry has seen significant exploits, such as the North Korean Lazarus Group's theft of $1.4 billion in assets from the Bybit platform.
Durbin kicked off his proposal by sharing the story of a New Lenox man who was scammed out of $15,000 after receiving a call from someone pretending to be a deputy. The scammer told him he had missed jury duty and could avoid arrest by paying a fine through a Bitcoin ATM. The victim, worried about the consequences, followed the instructions and deposited the money, only to realize it was a scam. “There was no way to trace the transaction to the scammer and no way to get the money back,” Dublin said. “This is just one example of a growing and alarming trend of crypto ATM fraud.”
As the world’s largest crypto gains widespread institutional interest, with 18 states, including Illinois, proposing to establish Bitcoin Reserves, crypto-related scams are also on the rise. Data provided to NBC News by the Federal Trade Commission (FTC) revealed that the amount of money consumers have reported losing to scams involving Bitcoin ATMs has nearly increased tenfold since 2020, topping $110 million in 2023 alone. FTC data also showed how older adults are disproportionately targeted, with consumers over age 60 more than three times as likely to be duped compared to younger adults.
Bitcoin ATMs, though banned in some countries, are legally operating in the U.S. and have proliferated, with nearly 29,642 machines now in operation, as per Coin ATM Radar data. These scams include fraudulent crypto ATMs and hackers targeting platforms like Bybit, where the notorious North Korean Lazarus Group stole $1.4 billion in assets last week, marking the most significant exploit in the industry’s 17-year history.