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Legislators in the US state of Wisconsin have unveiled a proposal in the state’s Senate to complement a prior measure introduced in the lower chamber aimed at preventing fraud linked to crypto ATMs.
Senator Kelda Roys, along with six other Democrats, unveiled Senate Bill 386 on Monday as supplementary legislation to Assembly Bill 384, which Democratic Representative Ryan Spaude unveiled on July 31.
According to the corresponding proposed bills, crypto ATM or kiosk operators must obtain a money transmitting license to operate in the state and are required to gather details about their users, including name, birthdate, number, address, and email.
Submitting matching bills in both chambers is a strategy to enhance the chances of a bill becoming law and expedites the legislative procedure as both houses can deliberate it at the same time.
Wisconsin aims to alert crypto ATM users
As per the bills, crypto ATM operators will be obligated to acquire a government-issued identification from their clients, such as a passport or driver’s license, and will be required to capture a photo of the customer.
Operators must authenticate their customers’ identities for each transaction, limiting users to $1,000 in transactions per day.
The bills stipulate that warnings about the potential for fraud must be displayed “within the customer’s line of sight” on the front of the machine.
Crypto ATMs generally impose much steeper fees compared to online crypto exchanges, and the bills recommend capping the fees that operators may charge customers to either a flat $5 fee or 3% of the transaction amount, whichever is greater.
Operators are also required to fully reimburse customers if an ATM is utilized to execute a fraudulent transaction, such as to a scammer, or if the operator is notified by law enforcement confirming that the transaction was fraudulent within 30 days.
FinCEN issues warning on crypto ATM frauds
On Aug. 4, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) released a notice to financial institutions urging them to report dubious transactions carried out via crypto ATMs.
“Criminals are unyielding in their attempts to rob victims, and they have learned to exploit pioneering technologies like CVC [convertible virtual currency] kiosks,” FinCEN Director Andrea Gacki stated.
FinCEN reported that it identified fraud, cybercrime, and drug trafficking as the three primary illegal activities conducted through crypto ATMs.
Related: Tasmanian police find top 15 crypto ATM users are scam victims
The agency has further confirmed that senior citizens are particularly susceptible to scams where malicious actors masquerade as bank employees, tech support specialists, or customer service representatives.
Global crackdown on crypto ATMs
Crypto ATMs have come under scrutiny from regulators worldwide due to concerns regarding their association with criminal activities.
On July 17, New Zealand outlawed crypto ATMs across the nation, citing their involvement in money laundering and criminal financing.
The UK has also intensified its regulatory actions on crypto ATMs, seizing seven crypto ATMs and arresting two individuals in southwest London in July on suspicions of money laundering and illegally operating a crypto exchange.
Grosse Pointe Farms, a small town just outside of Detroit, Michigan, has proactively passed a regulation on crypto ATMs even though the town does not currently have one.
Magazine: Philippines blocks major crypto exchanges, Coinbase scammer’s stash: Asia Express
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