US Senate Considering Bill to Limit Crypto ATMs

It is no secret that cryptocurrencies have performed very well in the last year. Bitcoin has especially seen lots of progress with the launch of spot ETFs, the achievement of new all-time highs, and so on. Naturally, this has meant that more consumers are eager to buy Bitcoin than ever before. Top exchanges are seeing record transaction volumes, peer-to-peer platforms are thriving, and, as Shraddha writes, many are looking into how to buy Bitcoin with a credit card.

But with all this interest comes some risk. Specifically, scammers have upped their efforts to steal from crypto investors, and the government seems to be taking this more seriously. An Illinois senator Dick Durbin is pushing for a new bill that aims to combat the spread of crypto scams.

However, this bill is somewhat controversial because it would work by limiting the activities of crypto ATMs. Crypto ATMs are one of the most important avenues for buying and selling tokens and allow consumers to access the asset class as easily as they would fiat currency. The problem is that crypto scammers have taken advantage of these in the past.

There are countless stories of vulnerable people who were told to pay a certain amount in Bitcoin to the government or as part of an investment scheme. Oftentimes, they are instructed to make these payments via crypto ATMs, as these do not have the same level of restriction as you would see on an exchange.

This new bill is called The Crypto ATM Fraud Prevention Act, and if it passes, it will require crypto payment service operators to speak with new members trying to make transactions of over $500. On top of this, users will be able to file for refunds within 30 days of a transaction if they have similarly filed police reports to that effect. One of the biggest issues with using crypto ATMs is that transactions made with digital assets cannot be reversed. This has led to victims permanently losing their funds in the past. But with this in mind, it will incentivize payment processors to do more in terms of consumer protection.

Additionally, new users of crypto ATMs will be restricted to $2,000 in a day or $10,000 worth of transactions over a 14-day period. As Durbin said regarding this development, “As our technology has evolved and become more sophisticated, so have scammers. Nefarious actors are now using intimidation and manipulation to scare Americans, particularly.”

This law is part of a growing wave of regulatory attention being paid to the cryptospace.

While crypto was ignored by lawmakers and the government for years, its growing financial implications have meant that it is getting more attention. Considering that the Trump administration seems especially interested in crypto, even announcing the first ever crypto summit in the White House, bills that serve the asset class are more likely to get through. Should this particular bill move forward, consumers can look forward to more protection.