Crypto ATM Fraud Prevention Act of 2025

Bill Number

S. 710

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-02-25: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (Sponsor introductory remarks on measure: CR S1347-1348; text: CR S1348-1350)

Last Updated

2026-06-04T11:03:24Z

AI-Generated Summary

Purpose

The Crypto ATM Fraud Prevention Act of 2025 aims to protect consumers from scams and fraudulent activities involving virtual currency kiosks (also known as crypto ATMs), which are machines that allow people to buy or sell digital currencies like Bitcoin using cash. It does this by requiring operators to register their kiosks, provide clear warnings and receipts, limit transactions for new users, and offer refunds for fraud victims, while giving the U.S. Department of the Treasury oversight.

Key Provisions

• Registration Requirements: Virtual currency kiosk operators must register with the Secretary of the Treasury within 90 days of the law's enactment and update every 90 days. This includes providing the operator's legal name, kiosk locations, operation dates, and virtual currency addresses (unique digital identifiers for wallets).
• Definitions: The law defines key terms, such as "virtual currency" (digital value on a secure digital ledger like blockchain), "virtual currency kiosk" (a machine exchanging cash for digital currency), and "new customer" (someone in their first 14 days of using the operator's kiosks).
• Pre-Transaction Disclosures: Before any transaction, operators must clearly display terms like fees, transaction details, and warnings about irreversible deals. They must also warn about common scams (e.g., fake government officials or too-good-to-be-true offers) and advise contacting customer service or law enforcement if fraud is suspected.
• Customer Acknowledgment and Receipts: Customers must confirm they understand disclosures at the kiosk. After transactions, operators must issue physical receipts with details like transaction amount, fees, date, time, a unique transaction identifier (transaction hash), and refund info. Receipts must also include operator contact info and fraud reporting guidance.
• Anti-Fraud Measures: Operators must create and submit a written anti-fraud policy to the Financial Crimes Enforcement Network (FinCEN, a Treasury division tracking financial crimes). They must appoint a full-time compliance officer (not the CEO or major owner) to oversee rules. Operators are required to use blockchain analytics (tools analyzing digital ledger data to spot fraud risks) to block suspicious transactions.
• Verbal Confirmation for New Customers: For transactions of $500 or more with new customers, operators must get verbal confirmation via live phone or video call that the customer understands the deal and isn't being scammed. Operators must make a reasonable effort to verify this.
• Transaction Limits for New Customers: Limits cap new customer transactions at $2,000 per 24 hours and $10,000 total to reduce fraud exposure.
• Refunds for Fraud Victims: New customers get full refunds (including fees) if fraudulently induced, within 30 days of applying with proof like a police report. Existing customers get fee refunds only. Willful denial of valid refunds leads to triple damages or $10,000 minimum. Applications must be filed within 30 days.
• Customer Service and Law Enforcement Support: Operators must offer 24/7 live phone support displayed on kiosks and provide dedicated contacts for police and agencies to report fraud.
• Penalties: Violations carry $10,000 civil fines per day, enforced by the Treasury under existing rules.
• State Law Interaction: Federal rules preempt (override) conflicting state laws but allow states to impose stronger protections.

Significant Changes to Existing Law

• Amends Section 5330 of Title 31, U.S. Code (on money services business registration) to explicitly include virtual currency kiosk operators, requiring periodic kiosk location updates—previously, such operators were not specifically mandated to register locations or addresses.
• Adds a new Section 5337 to Title 31, creating comprehensive fraud prevention rules for kiosks, including disclosures, analytics use, and refunds. This builds on but expands beyond general anti-money laundering laws by focusing on consumer scams specific to crypto kiosks, which were not previously regulated in detail.

Potential Impacts

• On Government Agencies: The Treasury and FinCEN gain new enforcement tools, like policy reviews and compliance checks, potentially increasing workload but improving fraud detection in the crypto sector. This could lead to better coordination with local law enforcement on scams.
• On Citizens: Consumers, especially inexperienced ones, benefit from clearer information, transaction caps, and easier refunds, reducing losses from scams (common at kiosks where fraudsters pressure victims to buy crypto quickly). However, it may slightly raise fees as operators pass on compliance costs.
• On International Relations: Minimal direct impact, though it could indirectly affect global crypto markets by signaling stronger U.S. oversight, potentially influencing foreign operators or encouraging similar rules abroad.
• On Operators: Kiosk businesses face higher compliance costs (e.g., analytics tools, staff, policies) but reduced legal risks from fraud claims, possibly leading to industry consolidation or innovation in anti-fraud tech.

Main Stakeholders Affected

• Virtual Currency Kiosk Operators: Primary targets, required to implement new systems, policies, and customer interactions.
• Customers/Users: Especially new or vulnerable individuals (e.g., seniors targeted by scams), gaining protections but facing transaction limits.
• U.S. Department of the Treasury and FinCEN: Responsible for registration oversight, policy reviews, and penalty enforcement.
• Law Enforcement and Government Agencies: Benefit from dedicated reporting lines and fraud data, aiding investigations.
• States and Local Governments: Can maintain or strengthen their rules unless they conflict with federal ones, affecting consumer protection enforcement.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens consumer protection under federal banking laws without creating new agencies, relying on existing Treasury authority. The refund mandate and penalties could lead to more lawsuits against non-compliant operators. Preemption clause ensures national uniformity but preserves state flexibility, avoiding federal overreach challenges.
• Constitutional: Aligns with Congress's commerce clause power to regulate interstate financial activities like crypto transactions. No apparent free speech or privacy issues, as requirements focus on fraud prevention rather than content censorship; verbal confirmations respect due process by mandating "reasonable efforts."
• Political: Addresses growing concerns over crypto scams amid rising digital currency adoption, potentially bipartisan appeal for consumer safety. It fills a regulatory gap in the fast-evolving crypto industry without banning kiosks, balancing innovation with oversight—though critics might argue it increases business burdens without addressing broader crypto regulations.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Durbin, Richard J. [D-IL]

Cosponsors (5)

Sen. Blumenthal, Richard [D-CT], Sen. Reed, Jack [D-RI], Sen. Welch, Peter [D-VT], Sen. Shaheen, Jeanne [D-NH], Sen. Merkley, Jeff [D-OR]

Recent Actions

• 2025-02-25: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (Sponsor introductory remarks on measure: CR S1347-1348; text: CR S1348-1350)
• 2025-02-25: Introduced in Senate

Bill Versions

• Crypto ATM Fraud Prevention Act of 2025 — issued 2025-02-25 — PDF (17 pages)