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U.S. Senator Cynthia Lummis (R-WY) is pushing for federal action against the growing problem of the crypto ATM scam, aiming to incorporate new safeguards into the Senate’s upcoming market structure bill. The legislation, co-sponsored with Senator Kirsten Gillibrand (D-NY), seeks to address the misuse of cryptocurrency kiosks that criminals exploit to defraud unsuspecting citizens.
According to a joint FBI and FinCEN report, fraud linked to crypto kiosks surged in 2024, with nearly $247 million lost across more than 10,000 reported incidents. Seniors accounted for a significant portion of these cases, underscoring the urgent need for protections against the crypto ATM scam.
“This is something that has concerned me for a long time,” Lummis tweeted. “Senator Gillibrand and I first introduced legislation stopping bad actors in the crypto kiosk space in 2023.”
Currently, no comprehensive federal framework directly targets the crypto ATM scam. While some states and localities have implemented transaction caps or required stronger fraud warnings, federal law remains largely silent on the issue.
Lummis and Gillibrand’s market structure bill is expected to provide not only a clearer framework for digital asset regulation but also targeted provisions to prevent the crypto ATM scam. These measures would create clearer compliance standards for operators while preserving access for legitimate users of cryptocurrency kiosks.
The push for regulation has drawn mixed reactions from the crypto industry. While stakeholders acknowledge the seriousness of the crypto ATM scam, some warn that overregulation could curb innovation and limit access to legitimate financial services.
“Scams are preventable through smart regulation, not industry elimination,” said Paul Tarantino, CEO of Byte Federal, a major crypto ATM operator.
Tarantino noted that his company already screens transactions for signs of fraud, particularly among older customers.
Industry leaders, including Tarantino, emphasize that collaboration between policymakers and businesses will be key to tackling the crypto ATM scam effectively without stifling growth in the digital asset economy.
Several municipalities have already taken steps to combat the crypto ATM scam. Cities such as Stillwater, Minnesota, and Spokane, Washington, have gone as far as banning crypto kiosks altogether. Others, like Grosse Pointe Farms, Michigan, have opted for transaction limits in an attempt to reduce fraud.
These piecemeal approaches highlight the difficulty of maintaining uniform protections across the country. By including strong anti-fraud provisions in the federal market structure bill, Lummis hopes to establish national standards that both protect consumers and support responsible industry practices.
If passed, the bill could help curb the crypto ATM scam by introducing a more consistent regulatory environment, offering protection for vulnerable groups while ensuring innovation in cryptocurrency services can continue.
