Wisconsin lawmakers unveil second crypto ATM bill to curb fraud

Wisconsin legislators have introduced a bill to bring crypto ATMs under state licensing and impose strict consumer safeguards, as these machines continue to draw legal scrutiny within the United States for their role in crime. Led by Senator Kelda Roys with support from six other lawmakers, Senate Bill 386 mirrors a companion measure that was already filed in the State Assembly last month. Across both SB 386 and the Assembly Bill 384, filed by Rep. Ryan Spaude (D-Wis.), lawmakers want to place cryptocurrency kiosk operators under the state’s money transmitter licensing system and add new layers of oversight for machines scattered across convenience stores, gas stations, and other retail spaces. Crypto ATMs are accessories in crime Wisconsin lawmakers have fast-tracked the measures in response to an uptick in fraud cases where bad actors have used crypto ATMs as a tool to dupe victims. The Treasury Department’s Financial Crimes Enforcement Network recently released a report highlighting that the number of crypto ATM related fraud complaints jumped 99% in 2024. Over $247 million was reportedly lost to these incidents, marking a 31% hike. Supporters of the measure argue that the largely unregulated nature of these terminals makes them a soft target for scammers, often preying on elderly residents and vulnerable communities. As such, regulators have proposed a framework that they believe would keep the more than 500 Bitcoin ATMs currently active within the state in check. How will Wisconsin regulate crypto ATMs? Under the proposed framework, any operator of a virtual currency kiosk in Wisconsin would need to obtain a state money transmitter license. Every kiosk would be required to display a prominent “Fraud Alert” both on its physical casing and electronically on the transaction screen. The warning, printed in at least 20-point type, would outline common scam tactics—such as impersonating loved ones, government agencies, or law enforcement—and warn users not to proceed if instructed to send virtual currency by someone they do not know. Every customer would have to acknowledge the warning before they would be able to transact. As an added layer of protection, first-time users will be required to submit their full legal name, date of birth, address, phone number, and email, along with a government-issued photo ID. For all other subsequent transactions, customers would be required to verify their identities, and a photo of the customer would be taken at the kiosk. Transaction limits and refunds Another key protection measure is a daily transaction limit of $1,000 per customer. For operators, the bill requires that fees be capped at the greater of $5 or 3% of the transaction amount. SB 386 also mandates a refund obligation, wherein victims of fraud would have a chance of recovering any lost cryptocurrencies if they notify both the operator and law enforcement within 30 days of the incident. No tolerance policy in the US As of August 12, at least five US states have introduced similar rules, with some even going as far as placing outright bans on crypto ATMs. In June, Spokane, Washington, became the first city in the state to outlaw the machines entirely. Operators were given 60 days to pull out more than 40 kiosks after police linked them to a surge in scams, many of which funnelled money overseas. Similarly, Grosse Pointe Farms , a small town in Michigan, which doesn’t even host any cryptocurrency ATMs, revealed plans to enforce strict mandates for ATM operators last month. Nebraska chose tighter controls instead of a ban. Its Controllable Electronic Record Fraud Prevention Act requires licensing, sets a $2,000 daily limit for new users, caps fees at 18%, and forces operators to issue refunds to scam victims who file reports within 90 days. Meanwhile, North Dakota is weighing its own version of rules, with daily limits, fraud alerts, and blockchain analytics to keep suspicious activity in check. The post Wisconsin lawmakers unveil second crypto ATM bill to curb fraud appeared first on Invezz

Source: Invezz