Arizona legislators introduce a bill to combat fraud related to Bitcoin ATMs
A new bill has been introduced in Arizona with the aim of protecting residents from Bitcoin ATM scams, following a series of incidents, including one where a woman lost $17,000 to fraudsters.
House Bill 2387, proposed by state representative David Marshall, seeks to establish strict regulations for cryptocurrency ATM operations.
The bill comes in response to a case involving Tamara, a Social Security recipient from Peoria, who became a victim of scammers posing as representatives from PayPal.
According to an ABC News affiliate, she was convinced to withdraw $7,000 from her checking account and $10,000 from her individual retirement account (IRA), which she subsequently transferred using a Bitcoin (BTC) ATM.
The scammers used threats and pressure tactics, claiming that her accounts had been compromised and that the transfers were necessary to protect her funds.
Arizona Attorney General Kris Mayes stated to ABC15 that Bitcoin-related scams are on the rise due to the difficulty in tracing the cryptocurrency. The proposed bill would introduce several protective measures, including:
– A daily transaction limit of $1,000
– Mandatory licensing for state operators
– Required refund policy options
The scale of cryptocurrency ATM fraud has seen a significant increase in recent years. According to the FBI’s 2023 Cryptocurrency Fraud Report, Arizona residents lost approximately $127 million to virtual money fraud, with seniors over 60 being particularly vulnerable.
Data from the Federal Trade Commission shows that Bitcoin (BTC) ATM fraud has surged from $12 million in 2020 to $112 million in 2023.
Tamara’s case exemplifies the common tactics employed by scammers, who often create a sense of urgency and fear to overcome victims’ suspicions.
“My Spidey senses were going off, but he said he wouldn’t put the money back unless I completed this task, and then it became a threat,” she explained to ABC15.
The proposed legislation demonstrates Arizona’s efforts to address this growing threat through increased regulation of cryptocurrency ATM operations, with the goal of protecting vulnerable residents from similar schemes.
The number of Bitcoin ATMs worldwide increased by 6% in 2024, reflecting the growing mainstream adoption of cryptocurrency.
These machines function like traditional ATMs, allowing users to purchase and sometimes sell Bitcoin and other cryptocurrencies using cash or bank cards, although selling fees are usually higher.
The first Bitcoin ATM was introduced in Vancouver in 2013, and their presence has since expanded to over 37,500 machines in more than 70 countries.
Recent data from Finbold, citing Coin ATM Radar, confirms this ongoing growth trend.
