A new bill has been introduced in Arizona to protect residents from scams involving Bitcoin ATMs. The bill, called House Bill 2387, proposes strict regulations on cryptocurrency ATM operations. The need for this legislation arose after a series of incidents, including one where a woman lost $17,000 to fraudsters.
The victim, Tamara, a Social Security recipient from Peoria, fell prey to scammers who posed as representatives from PayPal. They convinced her to withdraw $7,000 from her checking account and $10,000 from her individual retirement account (IRA). She then transferred the money using a Bitcoin ATM. The scammers used threats and pressure tactics, claiming that her accounts had been compromised and the transfers were necessary to protect her funds.
According to Arizona Attorney General Kris Mayes, Bitcoin-related scams are on the rise due to the difficulty in tracing the cryptocurrency. The proposed bill aims to implement several protective measures, including a $1,000 daily transaction limit, mandatory state operator licensing, and required refund policy options.
The scale of cryptocurrency ATM fraud has significantly increased in recent years. According to the FBI’s 2023 Cryptocurrency Fraud Report, Arizona residents lost around $127 million to virtual money fraud, with seniors over 60 being particularly vulnerable. Data from the Federal Trade Commission shows that Bitcoin ATM fraud has surged from $12 million in 2020 to $112 million in 2023.
Tamara’s case is an example of the common tactics used by scammers, who often create urgency and fear to manipulate victims. The proposed legislation demonstrates Arizona’s efforts to address this growing threat by imposing stricter regulations on cryptocurrency ATM operations, with the aim of protecting vulnerable residents from similar schemes.
The number of Bitcoin ATMs worldwide increased by 6% in 2024, indicating the growing mainstream adoption of cryptocurrency. These machines function like traditional ATMs but allow users to buy and sometimes sell Bitcoin and other cryptocurrencies using cash or bank cards, although selling fees tend to be higher. The first Bitcoin ATM was introduced in Vancouver in 2013, and since then, their presence has expanded to over 37,500 machines in more than 70 countries. Recent data from Finbold, citing Coin ATM Radar, confirms this ongoing growth trend.