Opinion by: Bill Repasky, Frost Brown Bill Llp Attribute
With more than 55 million Americans now using cryptocurrency in their daily life, cryptocurrencies have become an important element of our country’s financial system.
Like traditional ATMs, thousand -thousand of virtual currency kiosks – also known as Bitcoin ATMs -Pops up in communities across the United States to support cryptocurrency transactions, from converting cash to crypto to the purchase and sale of coins. The passage of Genius The law may enhance public demand for bitcoin ATMs while introducing Stablecoins.
Unfortunately, like any new technology, scammers have learned how to use these tools to make fraud. Expected to protect residents, some localities responded by The ban on these kios.
This is not a practical or effective solution – and it presents a real threat to all users and operators within the cryptocurrency ecosystem.
Fortunately, there are better, proven ways to combat crypto scams that maintain this important financial infrastructure.
The increase of crypto atm scam
Many Crypto ATM scams involve persuasive criminals who break as authority numbers, enabling their victims in thinking that they need to be forced to provide large amounts of money through cryptocurrencies such as Bitcoin to prevent jail or some other disaster. The Fincen’s notice of August 4, 2025FIN-2025-NTC1, the standard fraud schemes are explored in detail.
These scammers are cheating on people who are vulnerable to converting Fiat money to cryptocurrency to kios, often directly in the scammer’s purse – an action that is irreversible and often unreliable.
When introducing the Crypto ATM Fraud Prevention Act, for example, Senator Dick Durbin Relayed A story of a constituency that is being tricked by a criminal pretending to be law enforcement in making a $ 15,000 deposit in an ATM crypto.
According to 2024 by the FBI Crime Report on InternetThere were more than 10,956 complaints of crypto ATM fraud worth $ 246.7 million in losses last year – a 99% and 31% increase from 2023, respectively. While it is just a fraction of $12.5 billion Consumers were lost in financial fraud in 2024, obviously a growing problem that needs to be addressed.
The problem with the restrictions of the blanket
Spokane, Washington made waves when it Crypto ATMs banned Fully, a transfer of the city council claimed will help protect residents and avoid fraud.
This approach is similar to the prohibition of email to eliminate phishing attempts or prohibit adults from buying gift cards so that they do not fall into the hands of scammers.
The fraud is ultimately successful because it exploits human weaknesses, not because of any one technology. Prohibition on crypto ATMs, rather than focusing on ways to reduce the risk of scams, will only lead victims to complete fraudulent transactions in other ways.
Practical solutions for minimizing fraud
Catching the scam at the point when a victim is about to complete the transaction is often a more effective solution – meaning Crypto ATMs can be a major tool for preventing fraud. This involves warning users that they should not engage in transactions with people coming from law enforcement or other trusted individuals. It can also mean that users know that cryptocurrency transactions are irreversible and often unreliable. Service providers may also offer specialized warnings of unusual activity based on user profiles.
Related: Crypto ATM Limitations and Sweep forbid us: Here’s why
These types of interventions have proven successful in other types of financial fraud, such as wire transfer or even regular ATM removal. Crypto ATM operators ‘references remain in the latest scams and user preferences, using their expertise to implement effective tactics in avoiding fraud while still providing customers’ banking needs.
State regulators can also play an important role, making a license for crypto ATMs conditions in implementing effective warning rules for fraud and protocols for user relationships. Equally implemented regulations will force operators to compete for the business by providing a good user experience, rather than compromising safety.
Some lawmakers also take this procedure actively, before local fraud is encountered. For example, the town of Grosse Pointe Farms, Michigan is preemptively placed at the place of registration and warning requirements to Crypto ATMs (though not yet in town), which is the city council Says will offer “a little help” and transparency for residents, especially those who may not be familiar with cryptocurrency or do not know the common scams.
Protecting consumers, releasing change
Bedding that prohibits virtual currency kiosks do not solve age fraud problem. Scammers will find other ways to reach their victims, but millions of cryptocurrency users across the country will lose access to this important financial infrastructure.
Instead, concerned regulators should encourage ATM operators to use proven schemes to avoid fraud to interrupt fraud and protect prospective victims to make mistakes. These tools offer a smarter approach, both that protect consumers and maintain kapana -exciting cryptocurrency possibilities.
Opinion by: Bill Repasky, lawyer in frost brown todd llp.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
