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Julia Smith
Author
Julia Smith
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Key Takeaways:
- A new legislative effort is underway to address the growing misuse of crypto ATMs by fraudsters targeting vulnerable users.
- The proposed measures focus on establishing clear transaction safeguards and consumer refund options to mitigate losses.
- Enhanced oversight and accountability for crypto ATM operators are central to the bill’s strategy.
- The initiative reflects a broader push for harmonized regulations amid an expanding digital finance landscape.
- Lawmakers and industry experts stress the importance of combining regulatory action with public education to curb sophisticated fraud tactics.
Senator Dick Durbin (D-IL) introduced a new bill known as the “Crypto ATM Fraud Prevention Act” in a bid to address continued crypto fraud schemes, he announced on the Senate floor on February 25, 2025.
Dick Durbin Announces New Bill Addressing Crypto ATM Fraud
As our technology has evolved and become more sophisticated, so have our scammers,” Durbin said in a statement on Tuesday to NBC News, which was the first to report news of the bill.
“Nefarious actors are now using intimidation and manipulation to scare Americans, particularly seniors, into dumping their life savings into cryptocurrency ATMs,” he added, with the bill intended to “help curb the efficacy of these scams.”
“While this is still a lot of money, it ensures people’s entire life savings aren’t put at risk,” Durbin said.
The proposed legislation includes several specific measures to protect consumers.
Key Provisions of the Crypto ATM Fraud Prevention Act
If passed, the “Crypto ATM Fraud Prevention Act” would introduce a $2,000 spending limit for new users at a bitcoin ATM over a 24 hour period, while those wanting to withdraw $10,000 would have to wait over a two week period.
According to reports, the bill would mandate direct communication between users looking to transact over $500 and issue them a full refund should they report it to police within a 30 day period.
All other customers will be entitled to a minimum refund of any fees associated with the transaction.
The legislation responds to alarming trends in crypto-related fraud.
Data from the Federal Trade Commission (FTC) shows that over $114 million was lost in fraudulent crypto ATM transactions, sometimes known as BTMs, in 2023 alone.
“There are now more than 30,000 crypto ATMs in this country and they are being used by criminals to cheat Americans out of their hard-earned savings,” Durbin said.
According to Durbin, victims of such scams are often the elderly, with the FTC reporting that such schemes typically result in “exceptionally high losses.”
“Mr. President, it’s past time we put some common sense guardrails in place to stop fraud in this largely unregulated industry,” the Senator concluded.
Beyond Regulation: Building Fraud Resistance Through Education
While spending limits and refund options offer immediate protection, lasting solutions to crypto fraud will require widespread public education about these increasingly common scams.
Effective fraud prevention demands a partnership between government regulations, industry responsibility, and consumer awareness to create multiple layers of defense against sophisticated schemes.
The proposed legislation could be strengthened by including provisions for public awareness campaigns specifically targeting vulnerable populations with practical knowledge about recognizing and avoiding crypto scams.
Local law enforcement agencies also need specialized training to respond effectively when victims report these crimes, as many officers remain unfamiliar with cryptocurrency transactions and recovery options.
As Senator Durbin pushes for these regulatory safeguards, parallel efforts to build fraud resistance through education represent an equally critical component of a comprehensive solution.
Unlike current frameworks that offer only fragmented oversight, this bill introduces targeted safeguards—such as specific transaction limits and mandatory refund protocols—that address the unique vulnerabilities of crypto ATMs. These measures are designed to create a consistent, nationwide standard for consumer protection across the digital asset market.
Authorities are increasingly leveraging advanced blockchain analytics and real-time monitoring systems to track suspicious transactions and trace funds. These tools, developed by cybersecurity and crypto analysis firms, help pinpoint irregular patterns and can provide vital leads for law enforcement investigations.
Providers could be required to upgrade their systems by integrating robust identity verification, enhanced fraud detection algorithms, and clearer consumer alert mechanisms. While this may increase compliance costs, the long-term benefit is a safer operating environment that builds greater trust with users.
Public education is critical, as informed consumers are less likely to fall for urgent, deceptive requests. Regulatory agencies and consumer advocacy groups emphasize the need for awareness campaigns that teach individuals how to verify unsolicited communications and recognize common scam tactics.
Yes, given the borderless nature of digital assets, many countries are already adopting similar measures—such as transaction limits and strict compliance checks—to secure crypto ATMs. Enhanced global collaboration could lead to unified standards that not only reduce fraud but also foster a more resilient international framework for digital finance.
