Arizona Lawmakers Aim to Regulate Bitcoin ATMs Amid Rising Fraud Cases

PHOENIX, Ariz. — As Bitcoin and other cryptocurrencies surge in popularity, Arizona lawmakers are poised to introduce a bill aimed at tightening regulations on Bitcoin ATMs amid a growing number of fraud cases.

The legislation, known as House Bill 2387, seeks to establish safeguards for consumers using Bitcoin ATMs, including setting a daily transaction limit of $2,000 and requiring operators to clearly disclose transaction fees, which can exceed 20 percent. The proposed changes come in response to reports of scammers exploiting these machines to defraud unsuspecting users.

“He saw what I had in the account, he took it all,” Tamara Glerum, a Peoria retiree who lost $28,000 to scammers, told reporters. “It was all that I had because I’m on Social Security. That was my savings and my IRA.”

Law enforcement agencies across Arizona are grappling with a spike in cases involving Bitcoin ATMs. Scammers are increasingly directing victims away from traditional methods like gift cards to these kiosks, which allow cash deposits to be converted into cryptocurrencies.

John Griffin, a finance professor at the University of Texas at Austin, described the situation as “an epidemic.” He stated, “Scammers are using these to steal funds, giving them a way to circumvent the traditional banking sector and its protocols.”

AARP Arizona has been advocating for the bill alongside police and Bitcoin ATM operators. “It’s more about the individuals who use them and people who are using them because they’re being scammed,” said Brendon Blake, advocacy director at AARP Arizona.

The proposed bill would also mandate that Bitcoin ATM operators provide both paper and digital receipts for transactions, ensuring that users are fully aware of the fees associated with their usage.

Blake emphasized the importance of the legislation, stating, “We can’t always prevent fraud from happening, but we can certainly limit the damage.”

Critics of the current situation claim that existing regulations are insufficient to protect consumers, particularly vulnerable populations such as seniors. The proposed limits aim to give users time to reflect on their transactions before making significant cash deposits.

There is concern that, despite these regulations, scammers may simply redirect victims to different ATMs. However, proponents believe that creating barriers will slow down the process and reduce potential losses.

AARP Arizona is anticipating amendments to be added to House Bill 2387 this week before it proceeds to a full House vote.