WASHINGTON, DC – With scams using crypto kiosks (also known as ‘crypto ATMs’ or ‘Bitcoin ATMs’) to steal from older Americans on the rise, U.S. Senator Jack Reed (D-RI) is stepping up efforts to help fight fraud and prevent criminal from preying on senior citizens.  Federal law enforcement officials have referred to these crypto kiosks as ‘payment portals for scammers.’

Reed is teaming up with U.S. Senators Dick Durbin (D-IL), Richard Blumenthal (D-CT) and Peter Welch (D-VT) to introduce the Crypto ATM Fraud Prevention Act (S. 710) to help prevent scammers from stealing Americans’ savings through cryptocurrency schemes.  The bill would improve fraud warnings on all crypto kiosks; make cryptocurrency ATM operators develop a comprehensive anti-fraud policy, which must be submitted to the Financial Crimes Enforcement Network (FinCEN); and protect new customers -- who are most likely to be victims of fraud -- by limiting initial transaction amounts, requiring  verbal confirmation of major transactions, and making victims of fraud eligible for refunds if they file a report within 30 days.

“Crypto kiosk operators need to ensure their machines aren’t being used to victimize vulnerable citizens and launder money for illegal activities.  This bill takes commonsense steps to ensure the businesses that profit from these machines are doing their part to prevent fraud.  It’s a positive first step towards stopping the surge in crypto kiosk scams and cracking down on criminals,” said Senator Reed.  “We must also continue working to educate vulnerable populations, especially older Americans, to recognize and avoid crypto scams.”

Today, there are over 30,000 crypto kiosks nationwide, which are largely unregulated.  Many of them are placed in locations such as gas stations, vape shops, and laundromats.  These entities are paid a monthly fee by the crypto kiosk owner to allow the crypto kiosk to be operated on site.  While crypto ATMs are touted by operators as an easy way to change cash into crypto, in reality, they have become a preferred payment platform for international criminal enterprises who utilize the machines to carry out millions of dollars’ worth of anonymous, irreversible fraud – especially against older Americans.

The proposed federal legislation would replace a patchwork of state regulations with a uniform national standard that would defer to state regulations as long as they don’t weaken or conflict with federal law.

The Crypto ATM Fraud Prevention Act, which is led by Senator Durbin, will require crypto ATM operators to warn consumers about scams and take reasonable steps to prevent fraud at their machines.  It will also put in place measures to limit the amount that new consumers lose when they do fall victim to scams and will give law enforcement new tools to track down scammers.

Often, crypto scammers will contact elderly Americans, and using threats, intimidation, and fabricated backstories, try to coerce them into depositing large sums of money into the criminals’ crypto wallets via cryptocurrency ATMs.  According to data recently released by the Federal Trade Commission (FTC), the amount consumers reported losing annually in this form of fraud increased nearly tenfold between 2020 and 2023—from $12 million to $114 million and topping $65 million in the first half of 2024.  In 2023, the FBI’s Internet Crime Complaint Center received nearly 2,700 crypto ATM fraud complaints from individuals aged 60 and older—more than all other age groups combined.

Specifically, the Crypto ATM Fraud Prevention Act will:

  • Require warnings about the risk of fraud: This bill would require cryptocurrency ATM operators to provide clear warnings to consumers about the risk of fraud, including warnings of common types of scams and that consumers should never send money to someone they have never met.
  • Require operators to develop fraud prevention policies: For the first time, cryptocurrency ATM operators would be required to appoint a chief compliance officer and develop comprehensive anti-fraud policies, which must be submitted to the FinCEN Network.  Operators also would be required to provide live customer support during all operating hours.
  • Special protections for first tim-users and new customers—who are most likely to be victims of fraud: New customers, defined as a customer within 14 days of their first transaction, would be protected by the following provisions:

- Transaction limits of $2,000 per day, and $10,000 total over the first 14 days.

- Full refunds for fraudulent transactions if the customer makes a report within 30 days.   

- Requiring live, verbal confirmation for any transaction greater than $500.

  • Require crypto ATM operators to register and disclose ATM locations: Cryptocurrency ATM operators would be required to register with the U.S. Treasury Department and to disclose and regularly update the locations of all their ATMs.  Operators also would be required to provide a point of contact to relevant regulators and law enforcement agencies.
  • Require receipts and information sufficient to trace the transaction: Operators would be required to provide receipts for each transaction, including information sufficient to trace the transaction, such as the time, place, and amount of the transaction, and a transaction hash.  Receipts also would have to include contact information for relevant law enforcement and a link to the operator’s refund policy.

The bill has earned the endorsement of Americans for Financial Reform, National Consumers League, Public Citizen, Better Markets, and the National Consumer Law Center on behalf of its low-income clients.

To spot and avoid scams visit ftc.gov/scams. Report scams to the FTC at ReportFraud.ftc.gov.