New Restrictions on Bitcoin ATMs in Wisconsin Aim To Limit Harm of Crypto Scams
Reports of crypto scams are up 99% since 2023.
Cryptocurrency Medallions Alongside Wallet. Photo by CryptoWallet.com Images, (CC BY 2.0), via Wikimedia Commons
In Wisconsin gas stations or grocery stores, people might be noticing a new type of kiosk.
Bitcoin ATMs, or BTMs, allow people to buy digital currency using cash or a debit card. There are now an estimated 1,000 BTMs around the state, according to the state Department of Financial Institutions, or DFI.
As the popularity of digital currency has grown, scams involving these machines are also becoming more common. As a result, DFI has rolled out new regulations of BTMs across Wisconsin that are expected to take effect at the end of July.
Those rules include a $2,000 daily transaction limit, mandatory registration for bitcoin ATM operators and posted warnings about potential scams.
Michael Gavigan, DFI assistant chief legal counsel, said the regulations are meant to gather more data on BTMs in Wisconsin but also protect consumers from the emotional and financial strain of scams.
“If there’s not a daily transaction limit, the harm can be essentially unlimited,” he said. “This gives a number of opportunities for a victim to realize what is happening if somebody is asking them to go back day after day after day to put in more money (in the BTM).”
In 2024, nearly 11,000 people across the nation filed complaints on BTM scam transactions. That’s a 99 percent increase from 2023. The total losses, mostly for people over age 60, totaled $246.7 million, according to an FBI report.
WSAW in Wausau reported that a person in Portage County lost $40,000 to one of the scams.
The most common BTM scam in Wisconsin is the imposter scam, where the scammer impersonates an authority figure like a government official or sheriff’s deputy, Gavigan said.
“Someone will contact a 70-year-old grandma and say your grandchild has been arrested, they need bail money and here’s how you make that payment to get them out,” he said.
Preston Cherry, an assistant professor of finance and personal financial planning at the University of Wisconsin-Green Bay told WPR’s “Wisconsin Today,” that the regulations are a step in the right direction but people should still be cautious when using BTMs.
“ATMs have had consumer protection for decades, and we’re still seeing high levels of scam activity. And BTMs are very new. They’re in elementary stages … So just imagine the scam activity that’s going to go on with these machines at the early stages,” he said.
Once the consumer puts money into the BTM, he said it is nearly impossible to get it back. The money goes into a digital wallet that is then very quickly sent overseas where local authorities do not have access.
Experts including Gavigan and the Federal Trade Commission advise that no legitimate company or government agency will ever ask you to deposit money into a bitcoin ATM. If someone makes such a request, it’s a scam.
To submit a complaint to DFI for a BTM scam or any complaint regarding consumer credit transactions visit DFI’s website.
New guardrails start for bitcoin ATMs in Wisconsin was originally published by Wisconsin Public Radio.
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Do Americans appreciate what will happen if the US dollar loses status as the dominant reserve currency in the world? Why are we being this stupid and legitamizing crypto currencies? (Through things like “The Genius Act” signed by President Cankles last week). We will be making our adversaries like Putin very happy when we have to bail out billion dollar crypto bro’s during the next financial crisis.