PHOENIX (AZFamily) — With the rise in popularity of cryptocurrency, Bitcoin ATMs have also proliferated, with numerous machines available throughout Arizona.
As noted by Arizona’s Family Investigates, the state currently lacks regulations for Bitcoin ATMs, making them a target for scammers looking to exploit unsuspecting users.
However, a proposed bill in the state Legislature aims to bring about necessary changes.
House Bill 2387 seeks to establish protective measures, including a cap on the daily amount of money that can be deposited, as well as a requirement for operators to disclose their associated fees.
“He saw what I had in the account, he took it all,” recounted Tamara Gleru, a retiree from Peoria who fell victim to scammers, losing $28,000 primarily through a Bitcoin ATM.
“That was everything I had because I’m on social security. It was my savings and my IRA,” Gleru added.
Sadly, Gleru’s experience is not unique.
Law enforcement throughout the state is reporting an increase in incidents tied to these machines. Instead of using gift cards, criminals are directing their victims to Bitcoin ATMs.
“This method allows them to bypass traditional banking systems and the associated regulations,” explained John Griffin, a finance professor at the University of Texas at Austin who specializes in cryptocurrencies.
“Scammers are utilizing these ATMs to siphon funds, and I believe it’s an epidemic,” he added.
This is why AARP Arizona has collaborated with law enforcement, state lawmakers, and Bitcoin ATM operators to advocate for regulatory legislation.
“The primary concern lies with individuals using these machines who are falling victim to scams,” said Brendon Blake, advocacy director at AARP Arizona.
The proposed bill would necessitate that operators disclose fees—some of which can exceed 20%—requiring consumer acknowledgment, and ensuring a receipt (available in both paper and digital formats) is provided. Additionally, the ATMs would be restricted to transactions of no more than $2,000 each day.
“While we cannot entirely eliminate fraud, we can certainly mitigate its impact,” Blake noted.
These measures could have potentially aided Gleru.
“It won’t happen again since I will be more cautious this time. Unfortunately, they took my entire savings,” she expressed.
AARP Arizona recognizes that while scammers may redirect victims to other Bitcoin ATMs, the regulations would introduce a pause, allowing individuals to reconsider their actions and ideally prevent further losses.
AARP Arizona anticipates an amendment will be proposed to the bill on Thursday, with the likelihood of it proceeding to a full vote in the House thereafter.
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