“California’s determined crackdown on Bitcoin ATM scammers seeks to safeguard the cryptocurrency landscape, restoring trust and confidence among investors in the Golden State.”
Cryptocurrency ATM scams are on the rise, with scammers using bitcoin ATMs to swindle victims out of thousands of dollars. These ATMs provide an easy way for people to buy cryptocurrency quickly with cash, which is harder to track than wire transfers or checks. Scammers have been exploiting the convenience of these machines, leading to an increase in fraud cases.
To combat this issue, California has passed Senate Bill 401, which limits cryptocurrency ATM transactions to $1,000 per day per person starting in January. The law also prevents bitcoin ATM operators from collecting fees higher than $5 or 15% of the transaction, whichever is greater, starting in 2025. These measures aim to give people more time to realize they’re being scammed and prevent them from using large amounts of cash to buy cryptocurrency.
However, crypto ATM operators argue that these new laws will harm their industry and the small businesses that host their machines. They believe that the bill fails to address how to crack down on fraud effectively and instead punishes the entire industry.
Lawmakers in California have been striving to balance the need to support the cryptocurrency industry while protecting consumers. They have passed other legislation that tightens state regulation, including a law that requires digital financial asset businesses to obtain a license from the California Department of Financial Protection and Innovation by July 2025. Governor Gavin Newsom acknowledges that further refinement is needed to provide clarity to consumers, businesses, and regulators.
Victims of bitcoin ATM scams have reported losing significant amounts of money, with scammers using various tactics to trick people into handing over their cash. Law enforcement agencies have been able to recover some funds for victims by tracking down the cryptocurrency exchange involved in the transaction. However, getting money back from overseas exchanges is rare, and cooperation from exchanges varies.
Overall, the rise in cryptocurrency ATM scams highlights the need for increased awareness and regulation to protect consumers from fraud and exorbitant fees. While efforts are being made to address this issue, it is clear that more work needs to be done to prevent scammers from taking advantage of unsuspecting individuals.
