Wisconsin state legislators have introduced a bill in the Senate as a companion measure to a previously submitted bill in the House of Representatives, aimed at curbing fraud occurring through cryptocurrency ATMs.
Senator Kelda Roys, along with six other Democrats, jointly introduced Senate Bill 386 on Monday, as a companion to House Bill 384, which was proposed by Democratic Representative Ryan Spaude on July 31.
According to the two identical proposals, cryptocurrency ATM or kiosk operators must obtain a money transmission license to operate within the state and must collect user information, including name, date of birth, number, address, and email.
Submitting the same bill in both chambers simultaneously is a strategy to increase the bill's passage rate and expedite the legislative process, allowing both chambers to review the bill concurrently.
Under the bill, cryptocurrency ATM operators will need to collect government-issued documents from customers, such as passports or driver's licenses, and will be required to take photos of the customers.
Operators must verify the identity of customers for each transaction, with a daily transaction limit of $1,000 for users.
The bill requires warning labels to be placed "within the customer's line of sight" on the front of the machines, alerting potential fraud risks.
Cryptocurrency ATMs typically charge higher fees than online cryptocurrency exchanges, and the bill suggests limiting the fees that operators can charge customers to either a fixed fee of $5 or 3% of the transaction value, whichever is higher.
If the ATM is used to process fraudulent transactions, such as transfers to scammers, or if the operator is confirmed by law enforcement to have processed a fraudulent transaction within 30 days, the operator must fully reimburse the customer.
On August 4, the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) issued a notice requiring financial institutions to report suspicious transactions conducted through cryptocurrency ATMs.
"Criminals are constantly trying to steal victims' funds and have learned to exploit innovative technologies like CVC (convertible virtual currency) terminals," said FinCEN Director Andrea Gacki.
FinCEN pointed out that the three main illegal activities conducted through cryptocurrency ATMs are fraud, cybercrime, and drug trafficking.
The agency also noted that the elderly are more likely to become targets of malicious actors impersonating bank employees, technical support, or customer service representatives.
Due to concerns that cryptocurrency ATMs may be used for criminal activities, regulators around the world have been prioritizing them for oversight.
On July 17, New Zealand banned cryptocurrency ATMs nationwide due to their use in money laundering and criminal financing.
The UK has also strengthened its regulation of cryptocurrency ATMs. In July, regulators seized seven cryptocurrency ATMs in southwest London and arrested two individuals on suspicion of money laundering and operating an illegal cryptocurrency exchange.
In Grosse Pointe Farms, a town outside Detroit, Michigan, although there are currently no cryptocurrency ATMs, the town has proactively passed relevant regulatory measures.
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Original article: “Wisconsin Senator Submits Companion Bill Aimed at Curbing Cryptocurrency ATM Scams”
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