Senator Lummis Pushes Crypto ATM Safeguards Amid Fraud Surge

Senator Cynthia Lummis (R-WY) announced she will address cryptocurrency ATM vulnerabilities in upcoming market structure legislation she is co-sponsoring with Senator Kirsten Gillibrand (D-NY). “This is something that has concerned me for a long time, and Senator Gillibrand and I first introduced legislation stopping bad actors in the crypto kiosk space in 2023,” Lummis tweeted on Monday. The bipartisan effort reflects growing congressional awareness that cryptocurrency kiosks have become a favored tool for scammers targeting vulnerable populations, particularly seniors who may be less familiar with digital currency technology.

The legislative push coincides with stark data from federal agencies. The FBI’s Internet Crime Complaint Center reported nearly 10,956 incidents involving crypto kiosks in 2024—almost double previous years’ figures. The Financial Crimes Enforcement Network (FinCEN) issued an August warning highlighting the 31% spike in victim losses, which reached $247 million. Most concerning to regulators is the disproportionate impact on older Americans: adults over 60 accounted for more than two-thirds of total losses despite representing a small fraction of crypto users.

Regulatory action has already begun at the state level. District of Columbia Attorney General Brian Schwalb recently sued Athena Bitcoin, one of the country’s largest Bitcoin ATM operators, alleging the company charged undisclosed fees on scam-driven deposits while failing to implement adequate fraud protections. The lawsuit claims an astonishing 93% of deposits through Athena’s machines were tied to fraudulent activity, suggesting the company knowingly profited from scams targeting vulnerable consumers.

Not all industry participants dispute the need for reform. Paul Tarantino, president and CEO of ATM operator Byte Federal, told Decrypt he supports efforts to prevent abuse but warned against regulatory overreach. “Scams are preventable through smart regulation, not industry elimination—you don’t blame the pencil for the written word,” Tarantino said. His company has implemented protective measures including calling every customer over 60 to screen for potential scams, and he has advocated for stronger protections in conversations with regulators.

Tarantino provided revealing data suggesting seniors may already be exercising caution: 84% of people aged 60 or over who start registration with a Byte Federal kiosk never complete transactions. However, he cautioned that efforts to impose strict fee limits could backfire, potentially shutting down access to cash-to-crypto services for millions of legitimate users. “Let’s collaborate on best practices rather than destructive regulations,” he argued, maintaining that fraud originates with bad actors rather than the kiosks themselves.

The debate over cryptocurrency ATM regulation highlights the tension between consumer protection and maintaining financial access. While lawmakers like Lummis and Gillibrand seek to prevent predatory practices, industry representatives warn that overly restrictive measures could eliminate legitimate services for unbanked and underbanked populations who rely on cash-to-crypto conversions. The challenge for legislators will be crafting rules that deter fraud without eliminating the financial infrastructure that serves legitimate users.

As the market structure legislation takes shape, all parties appear to agree on the core problem: cryptocurrency ATMs have become an attractive vehicle for scammers. The disagreement centers on solutions—whether through stringent fee regulation, enhanced consumer verification processes, or industry-led best practices. With victim losses approaching a quarter-billion dollars annually and senior citizens disproportionately affected, the pressure for effective intervention continues to mount among lawmakers, regulators, and responsible industry participants alike.