[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 710 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 710
To amend title 31, United States Code, to prevent fraudulent
transactions at virtual currency kiosks, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 25, 2025
Mr. Durbin (for himself, Mr. Blumenthal, Mr. Reed, and Mr. Welch)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend title 31, United States Code, to prevent fraudulent
transactions at virtual currency kiosks, and for other purposes.
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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