States Tighten Laws as Bitcoin ATM Scams Target Older Americans

Lawmakers respond to surge in crypto ATM fraud with tighter rules and refund rights

A surge in scams involving Bitcoin ATMs has prompted U.S. lawmakers and regulators to take a harder stance against crypto-enabled fraud, especially as elderly Americans lose millions in targeted schemes.

One Texas family, scammed out of $25,000, saw local law enforcement use power tools to crack open a Bitcoin ATM, recovering $31,900 in cash. The Jasper County Sheriff’s Office led the intervention.

But while such responses may return funds, they do not address the root problem: scammers are increasingly using these machines to exploit vulnerable populations — with older adults bearing the brunt.

States Move to Restrict Bitcoin ATM Abuse

Across the country, state governments are enacting legislation aimed at curbing abuse:

• Spokane, Washington has banned Bitcoin ATMs entirely.

• Vermont now imposes a $1,000 daily limit on ATM transactions.

• Illinois proposes requiring ATMs to log the recipient address of every cash-to-crypto conversion.

• Nebraska has introduced licensing, transaction reports, and an 18% fee cap.

These state-level efforts reflect broader anxiety over the growing abuse of crypto infrastructure for illicit purposes — particularly as Bitcoin’s value continues to climb, increasing the appeal for fraudsters.

FTC: Fraud Losses from Bitcoin ATMs Top $114M in 2023

According to the Federal Trade Commission (FTC), fraud losses from Bitcoin ATMs totaled $12 million in 2020 and soared to $114 million by 2023.

Incomplete 2024 figures already show losses exceeding $66 million in just the first half of the year — setting the stage for another record-breaking tally.

The median individual loss stands at $10,000, and people aged 60 and older are over three times more likely than younger adults to report losses.

In fact, the FTC reports:

“More than two of every three dollars reported lost to fraud using these machines was lost by an older adult.”

Congress Pushes National Reform With Crypto ATM Fraud Bill

At the federal level, Senator Dick Durbin (D-IL) has introduced the Crypto ATM Fraud Prevention Act. The proposed legislation would:

• Limit new users to $2,000 per day and $10,000 over 14 days.

• Require human interaction for transactions above $500.

• Allow victims to receive refunds if they file a police report within 30 days.

Durbin, who will not seek re-election in 2026, framed the issue in moral terms:

“Enough is enough. Listen to the senior citizens losing their life savings. With 30,000 crypto ATMs across the country, more and more of this will occur.”

He also attempted to amend the GENIUS Act to address these scams during its Senate passage.