U.S. Senator Jack Reed (D-RI) has announced new rules to stop the rising problem of cryptocurrency fraud through kiosks that mainly target elderly Americans. Under S. 710 legislative law makers want to tighten control over crypto ATMs because scammers and money launderers abuse these machines.
Reed presented the bill together with Dick Durbin (D-IL), Richard Blumenthal (D-CT), and Peter Welch (D-VT). Through the planned legislation’s defining points the lawmakers demonstrated how to make fraud detection systems better.
Reed’s Bill Enforces Stricter Security on Crypto Kiosks
The law makes better fraud protection mandatory for cryptocurrency kiosks and demands companies life anti-fraud plans with FinCEN. It also offers consumer protection through spending rules with verbal verification for big purchases. Reed stated:
“Crypto kiosk operators need to ensure their machines aren’t being used to victimize vulnerable citizens and launder money for illegal activities. This bill takes commonsense steps to ensure the businesses that profit from these machines are doing their part to prevent fraud.”
Reed views the legislation as a significant start to fight crypto ATM fraud but thinks greater public education, especially targeting senior citizens, would give better results.
Rising Crypto ATM Fraud Prompts Government Action
The government takes this step because crypto ATMs have become the target of more fraudulent activities. Public accounts show that scammers mostly use kiosks to trick senior citizens out of money, according to research.
FTC reports crypto ATM fraud victims lost a combined $179 million in 2020 through 2024 by 2023. In the first half of 2024 users lost another $65 million.
The FBI receives about 2,700 complaints annually from people aged 60 and up who became the main targets of fraud artists during the past year. The suggested legislation aims to create a single national crypto ATM rule and gives states the choice to implement additional controls beyond this standard.
Crypto ATM Operators Must Register with U.S. Treasury
Under the new law crypto ATMs must show stronger fraud warnings and operators must appoint a top compliance officer who sends risk policies to FinCEN plus receive purchase restrictions which let new users move up to $10,000 in total transactions during their first 14 days.
“Transaction limits of $2,000 per day, and $10,000 total over the first 14 days. Full refunds for fraudulent transactions if the customer makes a report within 30 days.”
Also, operators must receive U.S. Treasury approval while revealing their kiosk locations. Consumer protection demands operators distribute detailed transaction documentation including a transaction code and to report fraud incidents to law enforcement.
Consumer Groups Push for Safer Crypto ATMs
Main consumer protection associations like Americans for Financial Reform, the National Consumers League, and Public Citizen endorse the bill. These groups act to enhance cryptocurrency ATM security after observing more crimes committed against users of digital currencies.
The Crypto ATM Fraud Prevention Act will give digital asset companies more responsibility while improving crypto kiosk security to protect users from criminal exploitation. In their future meetings, lawmakers will continue studying how to enhance authority over cryptocurrency practices.
Conclusion
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The Crypto ATM Fraud Prevention Act exists to defend consumers from fraud especially seniors who become targets for digital currency scammers more often. The Act brings stronger rules while making operators follow protection steps and tell users about possible risks. The enhanced supervision by lawmakers gains more strength while safeguarding digital asset users and securing crypto ATM processes.
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FAQs
1. What does the Crypto ATM Fraud Prevention Act do?
It strengthens fraud protections, mandates anti-fraud policies, and enforces transaction limits for crypto kiosks.
2. How does it protect new users?
New users face transaction limits, must confirm large purchases verbally, and can get refunds for fraud if reported within 30 days.
3. Who supports this bill?
Consumer groups like Americans for Financial Reform and Public Citizen back the bill to curb crypto ATM scams.
Glossary of Key Terms
Crypto ATM Fraud Prevention Act – A bill to enhance security in cryptocurrency kiosks.
Crypto ATM – A machine for buying or selling cryptocurrency.
FinCEN – A U.S. agency fighting financial crimes.
Verbal Confirmation – Required approval for large transactions.
Consumer Protection Groups – Advocates for safer financial practices.
Reference
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