Wisconsin's new bill mandates strict KYC for crypto ATMs, aiming to curb fraud and protect consumers with identity checks and transaction limits.
The bill's $1,000 daily limit and fraud alerts aim to protect users from scams, especially targeting vulnerable individuals like the elderly.
Wisconsin's KYC regulations on crypto ATMs follow similar international efforts, with Australia and New Zealand tightening rules to prevent fraud.
Wisconsin lawmakers have introduced a new bill aimed at cracking down on cryptocurrency ATM fraud. Senate Bill 386 mandates full Know Your Customer (KYC) protocols, requiring photo IDs for every transaction. It also places a $1,000 daily transaction limit on customers.
This move comes in response to a nationwide surge in fraud, with nearly $247 million in reported losses last year. The bill is part of a broader effort to regulate Bitcoin ATMs across Wisconsin and ensure consumer protection against rising scams.
The bill forces crypto terminal operators into Wisconsin’s money transmitter licensing system. Additionally, it introduces identity verification measures, including personal information collection before any initial transaction. Each machine will be required to display a fraud warning. These measures aim to reduce the vulnerability of crypto ATMs to money laundering and illicit activities.
Arjun Vijay, founder of crypto exchange Giottus, commented, “While crypto ATMs were developed as a natural extension of the crypto ecosystem, the absence of robust KYC protocols has made them vulnerable to money laundering and illicit activities.”
Consumer Protection and Transaction Limits
Senate Bill 386 also introduces consumer protection clauses, including mandatory fraud alerts and restrictions on fees. Crypto ATM operators must limit transaction fees to $5 or 3% of the transaction amount.
Additionally, robots need to be able to properly convey alerts regarding fraud, such as thieves posing as government authorities or loved ones. These adjustments are essential to lowering the rising number of fraud cases, which primarily target the elderly.
Dileep Kumar H V, director at Digital South Trust, stated, "While it may limit high-value trades and reduce anonymity, it builds public trust, paving the way for safer, more credible digital currency adoption in everyday transactions."
Similar initiatives have been observed abroad in addition to Wisconsin. New Zealand is proposing complete bans, while Australia has imposed stricter cash limitations for crypto ATM operators.
Following federal investigations that connected cryptocurrency kiosks to scams, Spokane, Washington, has already banned them in the United States. In order to ensure safer use for routine transactions, Wisconsin's initiatives are in line with the movement by lawmakers in several U.S. states to regulate cryptocurrency ATMs.
Wisconsin’s proposed changes, including mandatory KYC requirements and transaction limits, would go into effect 60 days after approval.
The post Wisconsin Senate Pushes for Strict KYC on Crypto ATMs to Combat Fraud appears on Crypto Front News. Visit our website to read more interesting articles about cryptocurrency, blockchain technology, and digital assets.
