Opinion: Bill LePaske, attorney at Frost Brown Todd LLP
Currently, over 55 million Americans use cryptocurrency daily, making it an important part of the American financial system.
Similar to traditional ATMs, tens of thousands of cryptocurrency terminals, namely Bitcoin ATMs, have appeared across the United States, supporting cryptocurrency transactions. With the passage of the GENIUS Act, public demand for Bitcoin ATMs may increase.
Unfortunately, new scams have emerged, leading some places to choose to completely ban these terminals. However, this is not an effective solution and instead poses a threat to the entire cryptocurrency ecosystem.
The rise of cryptocurrency ATM scams
Many scams involve fraudsters impersonating authorities who entice victims to transfer cryptocurrency to them. According to an FBI report, there were over 100,000 ATM scam complaints last year, resulting in losses of $246.7 million.
The problem with a complete ban
The city of Spokane in Washington has taken measures to completely ban cryptocurrency ATMs, a strategy similar to banning emails to eliminate phishing.
Practical solutions to reduce fraud
Intercepting scams just before victims complete transactions is often more effective. Cryptocurrency ATMs can become key tools in preventing scams by prompting users not to engage in transactions with individuals impersonating law enforcement.
State regulators can require cryptocurrency ATMs to implement effective fraud warning rules when issuing licenses. These measures can not only protect consumers but also unleash the innovative potential of cryptocurrency.
Opinion: Bill LePaske, attorney at Frost Brown Todd LLP.
This article is for general informational purposes only and should not be construed as legal or investment advice. The views expressed in the article are solely those of the author and do not reflect the views of Cointelegraph.
