Bitcoin News Today: Wisconsin Pushes Stricter Crypto ATM Rules to Curb 99% Surge in Scams

Wisconsin lawmakers have introduced a legislative proposal to impose stricter regulatory requirements on Bitcoin ATMs across the state, aiming to combat fraud and money laundering. The twin bills—Senate Bill 386, sponsored by Sen. Kelda Roys, and Assembly Bill 384, introduced by Rep. Ryan Spaude—seek to mandate Know Your Customer (KYC) compliance for all cryptocurrency kiosk transactions, regardless of their size [1]. The proposals follow a 99% increase in kiosk-related scams in 2024, with losses reaching $247 million, according to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) [1].

Under the proposed regulations, users of Bitcoin ATMs would be required to provide detailed personal information, including name, date of birth, address, phone number, and a government-issued photo ID, prior to any transaction [2]. These measures aim to close existing loopholes that allow small transactions to occur without identity verification, which fraudsters have exploited. The bills also impose daily transaction limits of $1,000 and restrict fees to either $5 or 3% of the transaction amount, whichever is lower [2].

In addition to KYC requirements, all crypto ATMs would need to display a fraud warning notice, alerting users to common scam tactics. The legislation includes a provision for victims of fraud to be eligible for refunds if they notify authorities within 30 days of the incident [3]. Supporters argue that the measures are crucial for protecting vulnerable consumers, such as the elderly, who have been frequent targets of crypto-related scams.

The proposed regulations mirror similar regulatory actions in other jurisdictions. Australia has enforced tighter cash limits and monitoring on crypto ATMs, while New Zealand is considering a total ban. In the U.S., Washington state’s Spokane city council recently decided to remove all kiosks following reports of massive fraud-related losses [4]. The Wisconsin legislation also aligns with national efforts, such as the Crypto ATM Fraud Prevention Act introduced by Illinois Senator Dick Durbin, which seeks to implement federal-level safeguards without overburdening legitimate users [5].

The twin bills have been referred to the Committee on Financial Institutions. If passed, key provisions, including identity verification mandates, would take effect 60 days after enactment [6]. Lawmakers stress that the goal is to maintain the convenience of crypto ATMs while increasing oversight and accountability to prevent their misuse for illicit activities.

The crypto industry remains divided on the proposal. Advocates believe the KYC rules will foster consumer trust and curb fraudulent behavior, while critics argue that the regulations may discourage casual users and push some activity to less-regulated platforms. The outcome of the bill could influence other states considering similar legislative approaches, signaling a broader trend toward tighter regulation of crypto kiosks across the U.S.

Source:

[1] AInvest (https://www.ainvest.com/news/bitcoin-news-today-wisconsin-pushes-stricter-crypto-atm-rules-curb-fraud-2508/)

[2] Coinpaper (https://coinpaper.com/10472/wisconsin-targets-crypto-atm-fraud-with-new-identity-verification-laws)

[3] Decrypt (https://decrypt.co/334686/wisconsin-democrats-senate-companion-bill-rein-in-crypto-kiosks)

[4] Cryptonews (https://cryptonews.com/news/wisconsin-lawmakers-renew-push-to-regulate-crypto-kiosks/)

[5] CryptoRank (https://cryptorank.io/news/feed/9baf9-wisconsin-lawmakers-renew-push-to-regulate-crypto-kiosks)

[6] Coincu (https://coincu.com/news/wisconsin-bitcoin-atm-kyc-bill/)