[Pages S1347-S1350]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

By Mr. DURBIN (for himself, Mr. Blumenthal, Mr. Reed, and Mr.
Welch):
S. 710. A bill to amend title 31, United States Code, to prevent
fraudulent transactions at virtual currency kiosks, and for other
purposes; to the Committee on Banking, Housing, and Urban Affairs.
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.

[[Page S1348]]

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.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

S. 710

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

[[Page S1349]]

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

[[Page S1350]]

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.
______