TLDR
- Lummis pushes for addressing crypto ATM fraud in the Senate’s market structure bill.
- The bill seeks to protect seniors from crypto ATM scams, a growing concern.
- Crypto kiosks saw a 31% rise in victim losses, with seniors heavily affected.
- Lummis aims for smart regulations to prevent crypto ATM scams without overreach.
U.S. Senator Cynthia Lummis (R-WY) has called for stronger safeguards around cryptocurrency ATMs amid growing concerns over their use in scams. In a recent tweet, Lummis emphasized the need to address this issue in the Senate’s upcoming market structure bill, which she co-sponsors with Senator Kirsten Gillibrand (D-NY).
The bill is expected to introduce regulations that would tackle the misuse of crypto kiosks, particularly those used by scammers to defraud unsuspecting individuals.
Rising Concerns Over Crypto ATM Fraud
Crypto ATMs, or kiosks, have become a popular tool for converting cash into cryptocurrency. However, they have also become increasingly associated with fraudulent activities, especially targeting vulnerable populations like seniors. A recent report from the FBI and FinCEN highlighted that in 2024, fraud cases linked to crypto kiosks surged, with losses reaching nearly $247 million.
More than 10,000 incidents were reported, with seniors accounting for a significant portion of the losses.
Lummis has made it clear that she is committed to addressing these concerns. “This is something that has concerned me for a long time,” she tweeted. “Senator Gillibrand and I first introduced legislation stopping bad actors in the crypto kiosk space in 2023.” Her proposed legislation aims to set clear guidelines for crypto kiosk operators to prevent fraud and protect consumers.
Addressing the Gaps in Current Regulation
At present, the federal government has not implemented comprehensive laws that specifically address fraud related to crypto ATMs.
While local and state governments have started to take action, such as limiting transactions or requiring more prominent fraud warnings, there remains a significant gap at the federal level.
Lummis’ remarks signal that the Senate’s market structure bill will not only provide clearer rules for crypto assets but also incorporate measures to regulate crypto kiosks effectively. This legislation would help reduce the risk of fraudulent activity while still allowing legitimate users to benefit from crypto kiosks.
Industry Reactions to the Proposed Regulations
While many in the cryptocurrency industry recognize the need to address fraud, there are concerns that excessive regulation could stifle innovation. Paul Tarantino, CEO of Byte Federal, a major crypto ATM operator, supports smart regulation but cautions against overreach.
“Scams are preventable through smart regulation, not industry elimination,” Tarantino said, noting that his company already screens customers for scams, particularly those over 60.
Tarantino advocates for collaboration to develop best practices for the industry rather than imposing restrictive regulations that could harm legitimate users of crypto ATMs. Despite these concerns, the rising tide of scam incidents has spurred lawmakers to act, and Lummis is at the forefront of this push.
State and Local Efforts to Combat Crypto ATM Fraud
Alongside federal efforts, state and local governments have taken action to curb crypto ATM fraud. Several U.S. cities, including Stillwater, Minnesota, and Spokane, Washington, have banned crypto kiosks, while others, like Grosse Pointe Farms, Michigan, have implemented transaction limits.
These local laws aim to reduce the potential for fraud but also highlight the challenges of creating uniform regulations across the country.
Lummis’ proposed regulations could bring more consistency to how crypto kiosks are regulated, potentially setting national standards that balance consumer protection with the need for innovation in the crypto space. This could lead to a more secure environment for users while also allowing the cryptocurrency industry to continue its growth.
