In a recent push to combat the rising wave of crypto ATM-related fraud, Senate Democrats are demanding immediate action from major Bitcoin ATM operators to safeguard elderly Americans. On September 12, a group of seven Democratic Senators, led by Majority Whip and Senate Judiciary Committee Chair Dick Durbin, issued a formal call to action, highlighting alarming statistics on fraud losses involving Bitcoin ATMs (BTMs).
The Senators—Elizabeth Warren, Richard Blumenthal, Jack Reed, Tina Smith, Peter Welch, and Sheldon Whitehouse—pointed to Federal Trade Commission (FTC) data revealing a staggering $65 million in fraud losses from BTMs in just the first half of 2024. Notably, individuals aged 60 and older have been disproportionately affected, with reports indicating they are more than three times as likely to experience financial losses through BTMs compared to younger adults.
The letters, dated September 11, were sent to the CEOs or top executives of ten major crypto ATM operators: Bitcoin Depot, CoinFlip, RockItCoin, Bitstop, Coinhub, Unbank, Athena Bitcoin, Byte Federal, Cash2Bitcoin, and Margo. The Senators' correspondence underscored concerns that these companies are contributing to a growing crisis of financial fraud targeting seniors.
"As companies like yours have placed BTMs in various businesses—sometimes even compensating these businesses to host your machines—there has been a marked increase in Bitcoin scams affecting elderly Americans," the Senators wrote in their letters. They cited a July report by Illinois Times, which documented a business owner removing a Coinhub ATM due to its misuse by scammers, and a New York Times article detailing egregious cases of scammers deceiving elderly victims through crypto ATMs.
The Senators have requested responses from the targeted companies by October 4, seeking detailed information on the measures they have implemented to combat fraud. They asked whether the firms provide scam warnings on their machines, impose transaction and deposit limits, and offer insurance against fraudulent activities.
The call to action comes amid a sharp rise in crypto-related fraud. The FTC reported that scams involving crypto ATMs have surged tenfold since 2020, escalating from $12 million to $144 million. The FBI also reported that $5.6 billion was lost to crypto fraud in 2023, marking a 45% increase from the previous year. Additionally, the median reported loss associated with Bitcoin ATM fraud was $10,000 in the first half of 2024, with seniors accounting for over two-thirds of the total losses.
In response to the FTC’s report, Bitcoin Depot noted that it has implemented scam warnings on its machines, featuring screen prompts to alert customers about potential scams. However, other major operators like RockItCoin, Coinhub, and Bitstop have yet to provide comments on the matter outside of regular business hours.
As the Senate Democrats continue to scrutinize the role of crypto ATMs in financial fraud, the focus remains on ensuring these operators take robust and immediate actions to protect vulnerable populations from exploitation.
September 2024, Cryptoniteuae