On February 25, 2025, Illinois Senator Dick Durbin introduced the Crypto ATM Fraud Prevention Act in response to the rising number of scams linked to cryptocurrency ATMs.

If passed, the legislation could impose daily fines of $10,000 on non-compliant crypto ATM operators, emphasizing the need for accountability in the industry.

The proposed legislation aims to establish strict regulations for crypto ATM operators, including transaction limits and consumer warnings to mitigate fraud risks.

Specifically, the bill would cap daily transactions for new users at $2,000 and limit total spending to $10,000 over a 14-day period.

Additionally, it mandates that operators communicate directly with customers for transactions exceeding $500 and offers full refunds for reported scams within 30 days.

Durbin highlighted the importance of these measures, particularly in protecting vulnerable populations like senior citizens, who are often targeted by scammers.

He recounted a troubling case where a constituent lost $15,000 to a scam involving a fake arrest warrant, illustrating the urgent need for regulatory action.

The Federal Trade Commission reported over $114 million in losses linked to fraud involving cryptocurrency ATMs in 2023, with older adults disproportionately affected.

The surge in reported scams has prompted increased regulatory scrutiny, as consumer losses related to crypto ATMs have escalated significantly.

A Springfield shop owner removed a crypto ATM after witnessing elderly customers being pressured into making large deposits, highlighting the real-world impact of these scams.

Governor JB Pritzker has also indicated plans to propose broader regulations for cryptocurrency companies to enhance consumer protections against fraud.

Consumer advocacy groups, including Americans for Financial Reform, have endorsed the proposed legislation as a necessary step towards addressing fraud in the crypto industry.