A coalition of consumer advocates, financial services and law enforcement are backing legislation designed to keep cryptocurrency ATMs from being a tool scammers use to fleece Wisconsinites of their savings.
The measure would, for the first time, regulate the more than 700 bitcoin kiosks at convenience gas and grocery stores, and other locations across Wisconsin. Police have said scammers have taken millions of dollars from Wisconsin seniors using the ATMs.
Erin Fabrizius, advocacy director for AARP Wisconsin, said the crooks create high pressure tactics to get people to remove their savings from the bank.
"They're getting people to deposit those U.S. dollars into an anonymous digital wallet at the crypto kiosk, where it's then converted to cryptocurrency," she said, "and the scammer can move it down the blockchain, and it can be out of the country in minutes."
The measure, Senate Bill 386, would set daily transaction limits and cap fees. It would also require operators to provide receipts, identify users in all transactions, and require refunds for scam victims.
A group representing the crypto industry has said the kiosks are a service to their customers.
The bipartisan measure will get a key hearing before the Senate Finance Committee at the Capitol in Madison.
Thousands of people in Wisconsin have lost some or all of their life savings through crypto kiosk scams. Police have said it's one of the most common crimes they investigate.
Karin Schmeling, a retired critical care nurse in Greenfield, got a blaring, flashing warning on her computer screen two years ago telling her she was being hacked. She called a phone number that began a three-hour ordeal that led her to her bank – and then to a crypto ATM.
"In my career, I was very used to dealing with crises, life-altering events," she said. "I had to intervene quickly, fix it quickly. Somehow this was more personal. And I felt like I had been kept emotional hostage – it felt like being kidnapped."
Schmeling testified before a group of activists formed to push state lawmakers to take action to regulate bitcoin ATMs across the state.
