New Bill Aims to Prevent Bitcoin ATM Fraud After Peoria Woman Loses Thousands
PEORIA, AZ — Arizona is taking steps to combat the rise of Bitcoin ATM scams, a trend that has been increasingly exploited by scammers in recent years.
The proposed House Bill 2387, introduced by state representative David Marshall, seeks to address Bitcoin ATM fraud by capping daily transactions at $1,000, mandating state operator licensing, and requiring refund policy options, among other measures.
“We’re observing a growing number of scammers using bitcoin as a means of payment, which is extremely difficult to trace,” Attorney General Kris Mayes told ABC15.
One resident of Peoria, named Tamara, fell victim to a scam last summer, resulting in a loss of $17,000.
“I lost $7,000 from my checking account and $10,000 from my IRA. I’m on social security,” Tamara recounted to ABC15.
Believing she was speaking with a representative from PayPal, Tamara was deceived by a fraudster over the phone.
“While I was on the phone with him, he said, ‘I just want you to know someone has tried to hack into all of your accounts, including your PayPal and IRA’,” Tamara shared.
The scammer convinced Tamara to withdraw money from her accounts to make it appear as though a hacker had gained access. She ended up purchasing $7,000 in gift cards and transferring an additional $10,000 through a Bitcoin ATM.
“My instincts were telling me something was off, but he threatened not to return the money unless I completed the task,” Tamara explained.
According to the 2023 FBI Cryptocurrency Fraud Report, Arizona suffered approximately $127 million in losses due to virtual currency fraud, with individuals over the age of 60 being the primary targets.
“There’s a lack of regulation surrounding Bitcoin machines and cryptocurrency in general, particularly with ATM machines. That’s why we are advocating for legislation that would limit daily deposits into Bitcoin ATMs,” Mayes emphasized.
The Federal Trade Commission reported that fraud associated with Bitcoin ATMs, or BTMs, amounted to $12 million in 2020, escalating to $112 million in 2023. By mid-2024, $66 million in fraud had already been recorded.
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