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Floor Speech
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Mr. DURBIN. Mr. President, now on a totally different subject, I would like to tell you about one of my constituents. He is a man from New Lenox, IL, in the suburbs of Chicago.
Late last year, he received an urgent phone call from someone claiming to be a deputy in the Will County Sheriff's Office. This self- proclaimed deputy informed my constituent that he had missed jury duty. As a result, the deputy said, there is a warrant out for your arrest.
The man was stunned. Don't worry, the deputy further explained. The man could avoid arrest, put the whole matter behind him. All he had to do was pay the fine. But he couldn't pay it by check or credit card. The deputy directed the man to a local cryptocurrency ATM machine and told him to deposit $15,000 into the machine, pay the fine, and all would be forgiven.
If you have been following the news, you might have guessed by now that the man on the phone wasn't a sheriff's deputy at all; he was a scammer. Once my constituent deposited his money into the crypto-ATM, it was gone--gone. There was no way to trace the transaction to the scammer and no way to get the money back.
This is just one example of a growing and alarming trend of crypto- ATM fraud. There are now more than 30,000 crypto-ATMs in this country, and they are being used by criminals to cheat Americans out of their hard-earned savings, to the tune of $114 million in 2023 alone. Most of the victims are senior citizens.
While these scams aren't all identical, they generally play out just like the one I described. A stranger calls and pretends to be from the government or the victim's bank. They make claims of unpaid fines, a frozen bank account, a credit card in default, or even threaten arrest.
The scammer then tells their victim that they must immediately go to a crypto-ATM at a nearby grocery store, gas station, or convenience store. Often, the scammer will try to stay on the phone with the victim throughout the scam, warning of dire consequences if they don't make the payments immediately. It is a way of preventing their victim from getting a moment to take a breath and just maybe realize what is going on.
Once the victim arrives at the crypto-ATM, the scammer will walk them through the process of depositing real money--cash--into the machine, buying Bitcoin or other cryptocurrency, and sending it to the scammer's digital wallet.
Last summer, a small business owner in my hometown of Springfield, IL, removed a crypto-ATM from the store after witnessing senior after senior walk in, talking on their phones, looking stressed, and depositing huge sums of cash into the machine. He said:
One hundred percent of the time that we saw somebody at the machine they were being scammed.
This is in a small store in Springfield, IL.
It wasn't just happening there. There are tragic stories of seniors losing their savings through these machines in every State in America.
A South Carolina retired couple lost $390,000 over the course of several months through a scam involving crypto-ATMs. Just this month, a sheriff's office in Walton County, FL, reported a resident that was cheated out of $129,000 through a crypto-ATM.
It is past time that we put some commonsense guardrails in place to stop fraud in this largely unregulated industry. That is why, today, I am joining with Senators Blumenthal, Reed, and Welch to introduce the Crypto ATM Fraud Prevention Act. This bill will require crypto-ATM operators to warn consumers about scams and take reasonable steps to prevent fraud at their machines.
It will also put in place measures to limit the amount that consumers lose when they do fall victim to scams and would give law enforcement new tools to track down and fight back against criminals.
I want to share a few key measures in this bill with you. First, the bill will provide special protection for consumers during the 2 weeks after they make their first transaction at a crypto-ATM, the period when a consumer is most likely to be a victim of fraud. During this time, customers will be limited to deposits of $2,000 per day and $10,000 total. While this is still a lot of money, it ensures people's entire life savings are not put at risk.
The bill will also require crypto-ATM operators to obtain verbal confirmation via a live phone call for any transaction with a new customer over $500. Do you remember when I told you scammers often stay on the phone with victims until the money has been deposited in their digital wallet? Well, this requirement will break that communication, give victims a chance to think, perhaps reach out to another member of the family, and make sure crypto-ATM operators can assess whether the customer is being scammed.
Next, the bill requires crypto-ATM operators to give prominent, clear warnings about the risk of fraud and tell consumers about common types of scams. While warnings alone are not enough, they are part of the key to preventing fraud.
Operators also will be required to issue paper receipts to customers after each transaction. The receipt will include, among other things, the date, time, and amount of the transaction and the transaction hash, which will allow law enforcement to more easily trace the transaction, collect evidence of the crime, and maybe even recover the stolen funds.
Next, operators will be required to use the analytics to screen for suspicious, illicit transactions. Some companies are effectively using this technology already. It should be used across the board.
Finally, crypto-ATM operators will be required to issue refunds to consumers who are victims of fraud. As long as victims make a sworn report to law enforcement and notify the operator within 30 days of the transaction, they will be entitled to a full refund. New customers will get full refunds. All other customers will be entitled to a refund of, at minimum, any fees associated with the transaction.
These measures are commonsense guardrails that will prevent countless Americans, particularly senior citizens, from losing thousands of dollars of their hard-earned savings to criminal scams. I urge all my colleagues on both sides of the aisle to join me to pass this bill into law. We don't have any time to waste.
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Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Crypto ATM Fraud Prevention Act of 2025''. SEC. 2. REGISTRATION WITH THE SECRETARY OF THE TREASURY.
Section 5330 of title 31, United States Code, is amended--
(1) in subsection (d)--
(A) in paragraph (1)(A), by inserting ``, any person who owns, operates, or manages a virtual currency kiosk in the United States or its territories,'' after ``similar instruments''; and
(B) by adding at the end the following:
``(3) Virtual currency; virtual currency address; virtual currency kiosk; virtual currency kiosk operator.--The terms `virtual currency', `virtual currency address', `virtual currency kiosk', and `virtual currency kiosk operator' have the meanings given those terms, respectively, in section 5337.''; and
(2) by adding at the end the following:
``(f) Registration of Virtual Currency Kiosk Locations.--
``(1) In general.--Not later than 90 days after the effective date of this subsection, and not less than once every 90 days thereafter, the Secretary of the Treasury shall require virtual currency kiosk operators to submit an updated list containing the physical address of each virtual currency kiosk owned or operated by the virtual currency kiosk operator.
``(2) Form and manner of registration.--Each submission by a virtual currency kiosk operator pursuant to paragraph (1) shall include--
``(A) the legal name of the virtual currency kiosk operator;
``(B) any fictitious or trade name of the virtual currency kiosk operator;
``(C) the physical address of each virtual currency kiosk owned, operated, or managed by the virtual currency kiosk operator that is located in the United States or the territories of the United States;
``(D) the start date of operation of each virtual currency kiosk;
``(E) the end date of operation of each virtual currency kiosk, if applicable; and
``(F) each virtual currency address used by the virtual currency kiosk operator.
``(3) False and incomplete information.--The filing of false or materially incomplete information in a submission required under paragraph (1) shall be deemed a failure to comply with the requirements of this subsection.''. SEC. 3. PREVENTING FRAUDULENT TRANSACTIONS AT VIRTUAL CURRENCY KIOSKS.
(a) In General.--Subchapter II of Chapter 53 of Title 31, United States Code, is amended by adding at the end the following: ``Sec. 5337. Virtual currency kiosk fraud prevention
``(a) Definitions.--In this section:
``(1) Blockchain analytics.--The term `blockchain analytics' means the analysis of data from blockchains or public distributed ledgers, and associated transaction information, to provide risk-specific information about virtual currency transactions and virtual currency addresses.
``(2) Customer.--The term `customer' means any person that purchases or sells virtual currency through a virtual currency kiosk.
``(3) Existing customer.--The term `existing customer' means a customer other than a new customer.
``(4) FinCEN.--The term `FinCEN' means the Financial Crimes Enforcement Network of the Department of the Treasury.
``(5) New customer.--The term `new customer', with respect to a virtual currency kiosk operator, means a customer during the 14-day period beginning on the date of the first virtual currency kiosk transaction of the customer with the virtual currency kiosk operator.
``(6) Transaction hash.--The term `transaction hash' means a unique identifier made up of a string of characters that act as a record of and provide proof that a transaction was verified and added to the blockchain.
``(7) Virtual currency.--The term `virtual currency' means any digital representation of value that is recorded on a cryptographically secured distributed ledger or any similar technology or another implementation, which was designed and built as part of a system to leverage or replace blockchain, distributed ledger technology, or their derivatives.
``(8) Virtual currency address.--The term `virtual currency address' means an alphanumeric identifier associated with a virtual currency wallet identifying the location to which virtual currency purchased through a virtual currency kiosk can be sent or from which virtual currency sold through a virtual currency kiosk can be accessed.
``(9) Virtual currency kiosk.--The term `virtual currency kiosk' means a stand-alone machine that is capable of accepting or dispensing legal tender in exchange for virtual currency.
``(10) Virtual currency kiosk operator.--The term `virtual currency kiosk operator' means a person who owns, operates, or manages a virtual currency kiosk located in the United States or its territories.
``(11) Virtual currency kiosk transaction.--The term `virtual currency kiosk transaction' means the purchase or sale of virtual currency via a virtual currency kiosk.
``(12) Virtual currency wallet.--The term `virtual currency wallet' means a software application or other mechanism providing a means for holding, storing, and transferring virtual currency.
``(b) Disclosures.--Before entering into a virtual currency transaction with a customer, a virtual currency kiosk operator shall disclose in a clear, conspicuous, and easily readable manner--
``(1) all relevant terms and conditions of the virtual currency kiosk transaction, including--
``(A) the amount of the virtual currency kiosk transaction;
``(B) the type and nature of the virtual currency kiosk transaction;
``(C) a warning that the virtual currency kiosk transaction is final, is not refundable, and may not be reversed; and
``(D) the type and amount of any fees or other expenses paid by the customer;
``(2) a warning relating to consumer fraud including--
``(A) a warning that consumer fraud often starts with contact from a stranger, and that the customer should never send money to someone they do not know;
``(B) a warning about the most common types of fraudulent schemes involving virtual currency kiosks, such as--
``(i) impersonation of a government official or a bank representative;
``(ii) threats of jail time or financial penalties;
``(iii) offers of a job or reward in exchange for payment, or offers of deals that seem too good to be true;
``(iv) claims of a frozen bank account or credit card; or
``(v) requests for donations to charity or disaster relief; and
``(C) a statement that the customer should contact the virtual currency kiosk operator's customer service helpline or State or local law enforcement if they suspect fraudulent activity.
``(c) Acknowledgment of Disclosures.--Each time a customer uses a virtual currency kiosk, the virtual currency kiosk operator shall ensure acknowledgment of all disclosures required under subsection (b) via confirmation of consent of the customer at the virtual currency kiosk.
``(d) Receipts.--Upon completion of each virtual currency kiosk transaction, the virtual currency kiosk operator shall provide the customer with a receipt, which shall include the following information:
``(1) The name and contact information of the virtual currency kiosk operator, including a telephone number for a customer service helpline.
``(2) The name of the customer.
``(3) The type, value, date, and precise time of the virtual currency kiosk transaction, transaction hash, and each applicable virtual currency address.
``(4) The amount of the virtual currency kiosk transaction expressed in United States dollars.
``(5) All fees charged.
``(6) A statement that the customer may be entitled by law to a refund if the customer reports fraudulent activity in conjunction with the virtual currency kiosk transaction not later than 30 days after the date of the virtual currency kiosk transaction.
``(7) The refund policy of the virtual currency kiosk operator or a Uniform Resource Locator where the refund policy of the virtual currency kiosk operator can be found.
``(8) A statement that the customer should contact law enforcement if they suspect fraudulent activity, such as scams, including contact information for a relevant law enforcement or government agency.
``(9) Any additional information the virtual currency kiosk operator determines appropriate.
``(e) Physical Receipts Required.--Not later than 1 year after the effective date of this section, each receipt required under subsection (d) shall be issued to the customer as a physical receipt at the virtual currency kiosk at the time of the virtual currency kiosk transaction, but such receipt may also be provided in additional forms or communications.
``(f) Anti-fraud Policy.--
``(1) In general.--Each virtual currency kiosk operator shall take reasonable steps to detect and prevent fraud, including establishing and maintaining a written anti-fraud policy that includes--
``(A) the identification and assessment of fraud-related risk areas;
``(B) procedures and controls to protect against risks identified under subparagraph (A);
``(C) allocation of responsibility for monitoring the risks identified under subparagraph (A); and
``(D) procedures for the periodic evaluation and revision of the anti-fraud procedures, controls, and monitoring mechanisms under subparagraphs (B) and (C).
``(2) Submission of anti-fraud policy to fincen.--Each virtual currency kiosk operator shall submit to FinCEN the anti-fraud policy required under paragraph (1) not later than 90 days after the later of--
``(A) the effective date of this section; or
``(B) the date on which the virtual currency kiosk operator begins operating.
``(g) Appointment of Compliance Officer.--Each virtual currency kiosk operator shall designate and employ a compliance officer who--
``(1) is qualified to coordinate and monitor compliance with this section and all other applicable Federal and State laws, rules, and regulations;
``(2) is employed full-time by the virtual currency kiosk operator;
``(3) is not the chief executive officer of the virtual currency kiosk operator; and
``(4) does not own or control more than 20 percent of any interest in the virtual currency kiosk operator.
``(h) Use of Blockchain Analytics.--
``(1) In general.--Each virtual currency kiosk operator shall use blockchain analytics to prevent sending virtual currency to a virtual currency wallet known to be affiliated with fraudulent activity at the time of a virtual currency kiosk transaction and to detect transaction patterns indicative of fraud or other illicit activities.
``(2) Compliance.--The Director of FinCEN may request evidence from any virtual currency kiosk operator to confirm compliance with this subsection.
``(i) Verbal Confirmation Required Before New Customer Transactions.--
``(1) In general.--Before entering into a virtual currency kiosk transaction valued at 500 dollars or more with a new customer, a virtual currency kiosk operator shall obtain verbal confirmation from the new customer that--
``(A) the new customer wishes to proceed with the virtual currency kiosk transaction;
``(B) the new customer understands the nature of the virtual currency kiosk transaction; and
``(C) the new customer is not being fraudulently induced to engage in the transaction.
``(2) Reasonable effort.--A virtual currency kiosk operator shall make a reasonable effort to determine whether the customer is being fraudulently induced to engage in the virtual currency kiosk transaction.
``(3) Method of confirmation.--Each verbal confirmation required under paragraph (1) shall be given by way of a live telephone or video call to a person employed by, or on behalf of, the virtual currency kiosk operator.
``(j) Refunds.--
``(1) In general.--
``(A) New customers.--Not later than 30 days after receiving an application under paragraph (2), a virtual currency kiosk operator shall issue a refund to a customer for the full amount of each virtual currency kiosk transaction, including the dollar value of virtual currency exchanged and all transaction fees, made during the period in which the customer was a new customer and for which the customer was fraudulently induced to engage in the virtual currency kiosk transaction.
``(B) Existing customers.--Not later than 30 days after receiving an application under paragraph (2), a virtual currency kiosk operator shall issue a refund to a customer for the full amount of all transaction fees associated with each virtual currency kiosk transaction made during the period in which the customer was an existing customer and for which the customer was fraudulently induced to engage in the virtual currency kiosk transaction.
``(2) Application.--A customer seeking a refund under paragraph (1) shall, not later than 30 days after the date of the virtual currency kiosk transaction, submit an application to the virtual currency kiosk operator that includes the following:
``(A) The name, address, and phone number of the customer.
``(B) The transaction hash of the virtual currency kiosk transaction or information sufficient to determine the type, value, date, and time of the virtual currency kiosk transaction.
``(C) A copy of a report to a State or local law enforcement or government agency, made not later than 30 days after the virtual currency kiosk transaction, that includes a sworn affidavit attesting that the customer was fraudulently induced to engage in the virtual currency kiosk transaction.
``(3) Enhanced damages.--Any person who willfully denies a refund to a customer in violation of paragraph (1) shall be liable to the customer for 3 times the amount of the refund owed under that paragraph or $10,000, whichever is greater. A penalty under this paragraph shall be in addition to any penalty under subsection (n).
``(k) Transaction Limits With Respect to New Customers.--
``(1) In a 24-hour period.--A virtual currency kiosk operator shall not accept more than $2,000, or the equivalent amount in virtual currency, from any new customer during any 24-hour period.
``(2) Total.--A virtual currency kiosk operator shall not accept a total of more than $10,000, or the equivalent amount in virtual currency, from any new customer.
``(l) Customer Service Helpline.--Each virtual currency kiosk operator shall provide live customer service during all hours that the virtual currency kiosk operator accepts virtual currency kiosk transactions, the phone number for which is regularly monitored and displayed in a clear, conspicuous, and easily readable manner upon each virtual currency kiosk.
``(m) Communications With Law Enforcement.--
``(1) In general.--Each virtual currency kiosk operator shall provide a dedicated and frequently monitored phone number and email address for relevant law enforcement and government agencies to facilitate communication with the virtual currency kiosk operator in the event of reported or suspected fraudulent activity.
``(2) Submission.--Not later than 90 days after the effective date of this section, each virtual currency kiosk operator shall submit the phone number and email address described in paragraph (1) to FinCEN and all other relevant law enforcement and government agencies.
``(n) Civil Penalties.--
``(1) In general.--Any person who fails to comply with any requirement of this section, or any regulation prescribed under this section, shall be liable to the United States for a civil monetary penalty of $10,000 for each such violation.
``(2) Continuing violation.--Each day that a violation described in paragraph (1) continues shall constitute a separate violation for purposes of such paragraph.
``(3) Assessments.--Any penalty imposed under this section shall be assessed and collected by the Secretary of the Treasury as provided in section 5321 and any such assessment shall be subject to the provisions of that section.
``(o) Relationship to State Laws.--The provisions of this section shall preempt any State law, rule, or regulation only to the extent that such State law, rule, or regulation conflicts with a provision of this section. Nothing in this section shall be construed to prohibit a State from enacting a law, rule, or regulation that provides greater protection to customers than the protection provided by the provisions of this section.''.
(b) Clerical Amendment.--The table of sections for chapter 53 of title 31, United States Code, is amended by inserting after the item relating to section 5336 the following: ``5337. Virtual currency kiosk fraud prevention.''. SEC. 4. EFFECTIVE DATE.
The amendments made by this Act shall take effect 90 days after the date of enactment of this Act. ______
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