US Senator Highlights How Market Structure Bill Could Combat Crypto ATM Scams

Update on US Senate Deliberation Over Crypto ATM Fraud Legislation

Crypto ATM Fraud: A Growing Concern

In a recent move by the US Senate, legislation addressing the digital asset market structure and potential fraud issues is gaining momentum. Wyoming Senator Cynthia Lummis and New York Senator Kirsten Gillibrand are advocating for measures that target fraud through Bitcoin ATMs, particularly affecting vulnerable senior citizens. Lummis highlighted findings from the Cheyenne police department, which reported 50 instances of fraud amounting to more than $645,000.

Federal Bureau’s Stance on Crypto Fraud

The absence of federal legislation specifically targeting crypto ATM fraud has become apparent as the US Federal Bureau of Investigation documented around 11,000 fraud cases at crypto kiosks in 2024, with losses exceeding $246 million. This data underscores the urgent need for federal guidelines to mitigate such fraudulent activities.

Senate’s Consideration of Digital Asset Legislation

As the Senate Banking Committee prepares to vote on a bill defining digital asset regulation by the end of the month, Senator Lummis has expressed hope that the legislation will be enacted by 2026. While the House of Representatives passed the CLARITY Act in July, it did not specifically address crypto ATMs. The current draft from Senate Republicans also omits this crucial aspect, signaling potential amendments before final approval.

Insight from Recent Legislative Discussions

The cryptocurrency industry has been closely monitoring Congressional developments since the CLARITY Act’s passage. Meetings between Congress members and industry executives included discussions on market structure and proposals for a national crypto reserve of up to 1 million BTC. Lummis remains optimistic that bipartisan efforts will strengthen consumer protections without stifling innovation, focusing on elder abuse prevention and establishing sensible regulations for digital asset kiosks.

Parallel Legislative Efforts and State Actions

Earlier this year, Illinois Senator Dick Durbin introduced the Crypto ATM Fraud Prevention Act to combat what he described as a burgeoning fraud trend. The bill aimed to enforce consumer protection measures at crypto ATMs, yet it stalled in the Senate Banking Committee.

In lieu of federal action, several US states and cities have enacted their own regulations. For example, Stillwater, Minnesota, and Spokane, Washington, have banned crypto kiosks to curb scams. Meanwhile, Grosse Pointe Farms, Michigan, imposed a $1,000 daily transaction limit on crypto kiosks despite lacking any ATMs at the time. By August, 13 states enacted regulations, including transaction limits and mandatory warnings, reflecting a proactive stance on consumer protection.