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Senate Bill Proposes Transaction Limits for Crypto ATMs to Prevent Fraud
U.S. Senator Dick Durbin has recently introduced the Crypto ATM Fraud Prevention Act in response to a growing trend of Bitcoin ATM scams, which have resulted in reported losses exceeding $110 million in 2023 alone. This proposed legislation aims to combat the rising tide of fraudulent activities by limiting transactions and mandating refunds for victims.
The bill outlines several key provisions designed to protect unsuspecting users from fraudsters’ schemes. Firstly, it sets a daily transaction limit of $2,000 for new users and $10,000 within a two-week period. Additionally, operators would be required to verify the legitimacy of transactions exceeding $500 through direct communication with customers.
Furthermore, if enacted into law, the bill would also establish refund guarantees for affected individuals in the event that they fall prey to these scams. The proposed legislation follows a recent inquiry conducted by Democratic senators, who questioned the measures taken by major Bitcoin ATM operators to safeguard senior citizens and other vulnerable groups from fraudulent activities.
Industry reaction to the proposal has been mixed, with some companies expressing support for the bill while others raise concerns about potential workarounds employed by scammers. For instance, a representative from CoinFlip emphasized that their machines facilitate “legitimate transactions” on a daily basis, describing them as “critical” components of the cryptocurrency ecosystem.
“We support legislation that includes strong protections for consumers, while preserving their right to access digital currencies,” the spokesperson stated.
On the other hand, critics argue that fraudsters may encourage victims to use multiple ATM locations to circumvent these transaction limits. Nevertheless, consumer advocacy groups have hailed the proposed bill as a positive step in addressing practices that have allowed fraudulent activities to flourish.
Mark Hays of Americans for Financial Reform described the legislation as “a good first step” in tackling the issues surrounding crypto ATM fraud. “This bill won’t solve all those problems, but it can help,” he noted.
Emma Fletcher from the Federal Trade Commission emphasized that scammers are increasingly exploiting these machines to steal money from unsuspecting individuals at an unprecedented rate. As cryptocurrency adoption continues to grow, advocates hope this proposed legislation will protect vulnerable consumers while still enabling access to digital currency services.
It is worth noting that several states have already taken action by implementing their own daily transaction limits.
Source: https://blockonomi.com/senate-bill-proposes-transaction-limits-for-crypto-atms-to-prevent-fraud/
