A group of United States Senate Democrats, including Majority Whip Dick Durbin, has called on crypto ATM operators to tackle fraud. The Senators sent letters on 11th September to ten leading crypto ATM operators and requested immediate action.
The letters sent to CEOs of Bitcoin Depot and CoinFlip, among other companies, focused on risks associated with using Bitcoin ATMs for fraudulent activities. The Federal Trade Commission (FTC) noted that scam-related losses connected to Bitcoin ATMs totaled $65 million in the first two quarters of 2023.
Moreover, fraud against elderly Americans has increased, and people over sixty are three times more likely to fall victim to scams.
Senators Demand Action on Crypto ATM Scams
During the communication, the Senators appealed to the Bitcoin ATM owners and operators to take action to ensure protection for consumers, especially senior citizens. They explained how firms have located these machines in several industries.
Additionally, they have even paid for space to house them. This has led to their easy access to children and other susceptible persons.
The media also supported the group’s arguments, including a New York Times article that described cases of elderly people being forced to use crypto ATMs for scams. The Senators highlighted these companies’ obligation to tackle the rampant financial fraud associated with their devices.
They asked several questions to the firms, including about the measures that have been put in place to reduce the risk of scams – including whether there are limits on transactions, if the users are informed and whether the companies offer insurance for scammed victims.
Crypto ATM Fraud Surge Alarms Regulators and FBI
The increase in fraud cases involving Bitcoin ATMs has elicited concern from various regulatory bodies and law enforcement agencies. The FTC stated that crypto ATM scams had seen a tenfold increase between 2020 and the following year alone. Losses have jumped $12 million to $144 million.
The FBI also highlighted that the absolute value of losses due to crypto fraud was $5.6 billion in 2023, 45% higher than the previous year. In 2023, the average loss per Bitcoin ATM-related scam was $10,000, and senior citizens were most likely to be targeted.
The senators are asking the companies to take action by October 4, following which they anticipate getting answers to their questions. They want to ensure that the firms put in place proper measures to prevent the occurrence of adverse events. Susceptible persons, including the elderly, need protection.
Next Steps for Crypto ATM Firms
The Senate Democrats’ push is part of a more extensive campaign against financial fraud and for the country’s vulnerable citizens. To strengthen this effort, legislators have issued a formal letter to the operators of crypto ATMs. The letter asks them to provide detailed information to accelerate the solution of this emerging problem.
Involved companies should show they are keen on preventing fraud and protecting the customers’ interests. In their letters, the Senators demanded that companies reveal whether they give their customers information on possible scams.
They also queried whether firms should cap the number of fraudulent transactions to prevent large-scale fraud. And whether customers have protections, such as insurance, in case of fraud. These questions will help identify the need for more actions and changes in the existing laws and regulations.
