New Guardrails on Crypto ATM Fraud

Vermont legislators recently passed a bill to extend a moratorium on new cryptocurrency ATMs in the state and require refunds for certain fraud victims who lose money through the machines.

The bill—sponsored by state Rep. Michael Marcotte (R-Coventry) and supported by AARP Vermont—passed the Legislature in May; the governor has signed it into law.

Crypto kiosks, which convert cash into virtual currency, have become a favorite tool among criminals seeking to defraud people. Fraud losses through crypto ATMs increased almost tenfold nationally from 2020 to 2023, Federal Trade Commission data shows. In the first half of 2024, losses topped $65 million, with people 60 and older more than three times as likely as younger adults to report a loss.

Marcotte’s legislation will extend an existing moratorium on new kiosks by one year, to July 1, 2026. It will also require kiosk operators to give new crypto ATM users a refund if they are victims of fraud and they report the crime within 90 days.

“We will see a lot less fraud— hopefully no fraud,” Marcotte says. He notes that the measure also increases state oversight of crypto kiosks and includes other anti-fraud provisions.

The bill’s passage came after AARP and others defeated a separate bill seeking to lift the moratorium. “The notion that we would kind of be going backwards, I think, was really dangerous,” says Colin Hilliard, associate state director for advocacy at AARP Vermont.

One provision in the competing bill—to increase the daily transaction limit from $1,000 to $2,000–did make it into Marcotte’s bill, despite AARP opposition. But the refund requirement is among the strongest such crypto ATM consumer protections in the country, Hilliard says.

—Michelle Cerulli McAdams