    [Congressional Record Volume 171, Number 37 (Tuesday, February 25, 2025)]
    [Senate]
    [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.
                                     ______