Bitcoin News Today: Wisconsin Pushes Stricter Crypto ATM Rules to Curb Fraud

Lawmakers in the Wisconsin State Senate are advancing a legislative effort to impose stricter regulatory controls on cryptocurrency ATMs, aiming to address a growing wave of fraud incidents linked to these machines. Senate Bill 386, introduced by Sen. Kelda Roys, and Assembly Bill 384, proposed by Rep. Ryan Spaude, both seek to enforce mandatory Know Your Customer (KYC) protocols for every transaction [1]. These bills target the state's 582 Bitcoin ATMs, commonly found in locations like gas stations and convenience stores, and are part of a broader push to enhance consumer protection and reduce the risk of illicit activity [2].

Under the proposed legislation, any individual using a crypto ATM would be required to present a government-issued photo ID and provide personal information such as name, date of birth, address, and phone number [3]. This marks a significant shift from the relatively unregulated landscape that has allowed these machines to operate with minimal oversight. Additionally, the bill sets a $1,000 daily transaction limit per user and restricts operator fees to either $5 or 3% of the transaction amount, whichever is greater [4].

The legislation also mandates that each machine display a visible warning about the risks of fraud, including the tactic of scammers posing as government officials or family members [5]. These alerts are intended to raise awareness, particularly among vulnerable groups such as the elderly, who have been disproportionately affected by scams. The bill further requires operators to offer refunds to victims who report fraud within 30 days of the transaction, a measure aimed at fostering greater trust in the system [6].

Supporters of the bill argue that the new regulations will help curb the misuse of crypto ATMs for money laundering and fraud. The Financial Crimes Enforcement Network (FinCEN) reported a 99% increase in kiosk-related scams in 2024, with losses exceeding $247 million [7]. By enforcing KYC requirements and transaction limits, the state aims to align with a global trend of increased oversight in the cryptocurrency space. For example, Australia has introduced stricter cash transaction limits, while New Zealand is considering a complete ban on such machines [8].

These developments in Wisconsin are in line with actions taken in other U.S. cities. In Spokane, Washington, the city council recently voted to remove all cryptocurrency kiosks following federal investigations that linked them to significant fraud-related losses [9]. Similarly, U.S. Senator Dick Durbin of Illinois is advocating for federal-level reforms through the Crypto ATM Fraud Prevention Act, which seeks to establish nationwide transaction caps and user protections [10].

If approved, the proposed KYC and transaction requirements would go into effect 60 days after enactment [11]. The bills are currently under review by the Committee on Financial Institutions. The broader regulatory movement across the U.S. and globally reflects an increasing emphasis on balancing innovation in the digital currency space with the need to protect consumers and ensure compliance with financial crime prevention standards [12].

Source:

[1] Mitrade (https://www.mitrade.com/insights/news/live-news/article-3-1032460-20250812)

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

[3] AInvest (https://www.ainvest.com/news/bitcoin-news-today-wisconsin-proposes-kyc-rules-1000-cap-bitcoin-atms-2508/)

[5] AInvest (https://www.ainvest.com/news/bitcoin-news-today-wisconsin-proposes-kyc-rules-bitcoin-atms-1000-daily-limit-2508/)

[11] Bitget (https://www.bitget.com/news/detail/12560604906770)

[12] Cryptofront News (https://cryptofrontnews.com/wisconsin-senate-pushes-for-strict-kyc-on-crypto-atms-to-combat-fraud/)