Senator Durbin Introduces Bill to Combat Crypto ATM Fraud in the U.S.

• The Crypto ATM Fraud Prevention Act mandates operators to implement fraud detection analytics and provide clear scam warnings to users.
• New cryptocurrency ATM users would face two weeks with daily deposit limits and mandatory live call confirmations for large transactions.
• According to the new rules, consumers who report fraudulent transactions during the first thirty days can receive full reimbursement.

On February 25th of 2025, Illinois Senator Dick Durbin joined three Democratic colleagues to introduce the Crypto ATM Fraud Prevention Act in the United States Senate. The proposed legislation seeks simultaneously to improve consumer protection safeguards while setting stronger rules for operators of cryptocurrency automatic teller machines to reduce fraud cases.

Senator Durbin Advocates for Stricter Regulations

During his Senate address, Senator Durbin showcased his opposition to cryptocurrency by calling for safety regulations to protect consumers from the unregulated cryptocurrency market. Durbin described the key measures contained in the unpublicized bill when he spoke on the Senate floor.

The proposed legislation mandates that crypto ATM operators take proactive measures to prevent fraud. Operators would be required to display clear warnings about potential scams and employ analytics to detect suspicious activities. Some operators have already adopted such practices, setting a precedent for industry-wide standards.

This legislation establishes specific protection measures for minority groups who fall into two distinct categories which include elderly citizens and young users of cryptocurrency. During their first two weeks of using the system operators would limit new users to make daily deposits of $2,000 which totals to $10,000 in maximum deposits. The bill requires operators to validate transactions over $500 by making a live telephone call to the customer to stop typical scams that involve attackers keeping a continuous phone connection with their targets.

Additionally, the bill stipulates that all customers reporting fraudulent transactions to law enforcement within 30 days are eligible for full refunds. It also requires crypto ATMs to provide paper receipts containing information beneficial to law enforcement investigations.

After Durbin and six other Democratic senators wrote their September letter to leading crypto ATM providers regarding their anti-fraud measures this legislative bill was created.

The Federal Trade Commission reports that crypto ATMs have witnessed a substantial increase in fraud reports because the United States currently hosts more than 31,000 machines. In 2023 consumers experienced $100 million in crypto ATM fraud losses and during the first half of 2024, they lost another $65 million with each fraud impact totaling $10,000. People aged 60 or above faced three times more chances of becoming victims of scams.