ATM Industry Association (ATMIA) Statement on State Legislation Forbidding the Deployment of Cryptocurrency ATMs and Kiosks

It is an unfortunate fact of life that every form of payment is susceptible to fraud. This is certainly not a recent development; the roots of payment fraud can be traced back at least 600 years to scams such as the ‘Spanish Prisoner’ scam.

Over the past two years, the volume of state legislation addressing various aspects of cryptocurrency has increased significantly. New laws are addressing everything from licensing and taxation to unclaimed property and financial disclosures. More recently, however, there have been increasing efforts at the state level to ban cryptocurrency ATMs and kiosks altogether. The intended outcome of these bans is presumably to eliminate cryptocurrency fraud from the self-service channel.

Unfortunately, eliminating a payment channel does not eliminate fraud. Fraud does not disappear—it simply changes form and moves to another channel. A complete ban ultimately punishes consumers by removing a convenient and accessible way to conduct cryptocurrency transactions. Annual payment card fraud is estimated to total approximately $33 billion globally – roughly twice the estimated amount attributed to cryptocurrency fraud. Looking specifically at older adults, a population that is often cited as particularly vulnerable to financial fraud, estimates place cryptocurrency fraud at $4.4 billion compared with $7.7 billion for payment card fraud. Yet, there have been no widespread calls to ban payment cards. 

Similarly, fraudulent use of gift cards is becoming an increasingly significant payments issue, but the solution has not been to eliminate gift cards as a payment option. Instead, industry stakeholders, consumers and law enforcement have focused on education, prevention, detection, and enforcement.

ATMIA certainly acknowledges that cryptocurrency fraud is a serious and growing concern. Our industry is committed to being part of the solution by helping consumers and local law enforcement recognize cryptocurrency-related fraud and understand how to respond when it occurs. State legislatures should take the same approach by supporting measures that address fraudulent activity without eliminating legitimate consumer access to the technology.

Cryptocurrency-related fraud can be reported through ATMIA’s global crime database, the CCMIS. Law enforcement agencies can also request full access to the database to assist with investigations and identify trends and connections across jurisdictions.

ATMIA also remains actively engaged in monitoring the regulatory and legislative landscape affecting our industry. Through its Government Relations Committee (GRC), ATMIA keeps members informed about emerging issues, including cryptocurrency-related legislation, and provides opportunities to share industry expertise and insights. In addition, ATMIA teams up with third parties to monitor legislation and regulations affecting the ATM industry and provides members with timely updates through its tracking tools and communications channels. This ensures members have access to up-to-date information on regulatory developments and can stay informed about issues that may impact their businesses. We encourage members to stay engaged, participate in our committees, and help shape the industry's response to the issues that impact our customers and operations.