Bitcoin News Today: Wisconsin Proposes Strict KYC Rules for Crypto ATMs to Combat 99% Fraud Surge

Wisconsin has moved to crack down on cryptocurrency ATM fraud with a pair of legislative proposals aimed at enhancing oversight and consumer protection. Senate Bill 386 and Assembly Bill 384, introduced on August 11, 2025, and July 31, 2025, respectively, establish a unified regulatory framework for the state’s 582 Bitcoin ATMs. These bills, co-sponsored by several lawmakers, seek to integrate crypto ATMs into the state’s money transmitter licensing system and enforce stringent identity verification measures [1].

The legislation mandates that operators obtain a payment transmitter license and implement Know-Your-Customer (KYC) procedures before allowing any transactions. Users must provide personal information such as name, date of birth, address, phone number, and a government-issued photo ID. Daily transaction limits are capped at $1,000 per customer, and commissions are restricted to either $5 or 3% of the transaction amount, whichever is greater. Additionally, the machines must display clear fraud warnings, and victims who report incidents within 30 days are eligible for full refunds [2].

The push for tighter regulation comes in response to a 99% increase in crypto ATM fraud complaints in 2024, with victims losing nearly $247 million across the U.S. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued urgent warnings about the growing risks associated with unregulated crypto kiosks [3]. In Wisconsin, crypto ATM fraud has surged, prompting lawmakers to act swiftly to close perceived regulatory gaps.

Proponents argue that the measures will reduce the machines’ appeal to criminals while increasing public trust in digital currency transactions. Arjun Vijay, founder of Giottus exchange, noted that the lack of KYC procedures has left crypto ATMs vulnerable to money laundering and illegal activity [4]. However, critics have expressed concerns over the erosion of privacy, as the new rules effectively eliminate the anonymity traditionally associated with cryptocurrency transactions.

The bills are now under review by the Committee on Financial Institutions. If approved, the identity verification requirements will take effect 60 days after passage. The legislation mirrors similar actions in other regions, such as Australia and New Zealand, where regulators are also tightening controls on crypto ATMs. In the U.S., cities like Spokane, Washington, have taken even stricter measures, including outright bans on the machines [5].

As the debate over crypto regulation intensifies, Wisconsin’s proposals reflect a broader trend of state-level efforts to address the risks associated with digital assets. With other states, including Illinois, advancing their own regulatory measures, the outcome in Wisconsin could set a precedent for the future of crypto ATM oversight in the United States [6].

Sources:

[1] Wisconsin Lawmakers Renew Push to Regulate ...

https://cryptonews.com/news/wisconsin-lawmakers-renew-push-to-regulate-crypto-kiosks/

[2] Wisconsin Democrats File Senate Companion Bill to Rein ...

https://decrypt.co/334686/wisconsin-democrats-senate-companion-bill-rein-in-crypto-kiosks/

[3] Wisconsin Pushes Strict KYC Rules for Bitcoin ATMs

https://www.bitget.com/news/detail/12560604907386

[4] Wisconsin's Crucial Bitcoin ATM Bill: Understanding New ...

https://www.bitget.com/news/detail/12560604906770

[5] Wisconsin lawmakers unveil second crypto ATM bill to curb ...

https://invezz.com/news/2025/08/12/wisconsin-lawmakers-unveil-second-crypto-atm-bill-to-curb-fraud/

[6] Wisconsin Bill Mandates Full KYC for Bitcoin ATMs

https://coincu.com/news/wisconsin-kyc-bitcoin-atm-bill/