U.S. Senator Cynthia Lummis has raised alarm bells over cryptocurrency ATMs, advocating for stricter regulations to counteract the growing issue of scams, primarily targeting seniors. In collaboration with Senator Kirsten Gillibrand, Lummis aims to incorporate these concerns into forthcoming market structure legislation.
Lummis voiced her long-standing concerns about cryptocurrency kiosks on social media, highlighting efforts with Gillibrand to curtail illicit activities within the sector, first initiated in 2023. Her remarks coincide with rising alerts from law enforcement and regulatory bodies over the surging fraud associated with these machines, which facilitate cryptocurrency deposits via cash transactions. Notably, the Financial Crimes Enforcement Network reported a sharp increase in victim losses, which have risen by 31% in 2024.
The FBI’s Internet Crime Complaint Center recorded a nearly two-fold increase in complaints related to crypto kiosks, with adults over 60 suffering the brunt of these scams. Despite being less likely to use crypto services, this demographic constituted over two-thirds of the losses.
The seriousness of the issue has spurred state-level actions. District of Columbia Attorney General Brian Schwalb recently filed a lawsuit against Athena Bitcoin, accusing the company of charging undisclosed fees and failing to implement adequate fraud prevention measures. The lawsuit alleges that a significant portion of transactions via Athena’s ATMs, approximately 93%, were linked to fraudulent schemes.
While concerns are widespread, industry leaders advocate for balanced regulatory measures. Paul Tarantino, CEO of ATM operator Byte Federal, welcomes actions to prevent misuse but cautions against excessive restrictions. He emphasizes that scams should be tackled through sensible regulation rather than by dismantling the industry. Tarantino noted that his company proactively screens customers over 60 for potential fraud and supports strengthened consumer protections. He believes stringent fee regulations could unintentionally harm legitimate users’ access to cash-to-crypto services, suggesting that the focus should be on curbing fraudsters rather than penalizing the tools used.
As discussions continue, the push for smart regulations seeks a collaborative approach to mitigate ATM-related crypto frauds while preserving the utility and accessibility of these services.