Washington, July 22 (IANS) US lawmakers pressed federal regulators to strengthen oversight of cryptocurrency ATMs after Americans lost $388 million to scams involving the machines last year.
The issue emerged during a House Financial Services subcommittee hearing with Andrea Gacki, director of the Financial Crimes Enforcement Network, or FinCEN. Lawmakers said the machines had become a frequent payment channel for romance scams and schemes targeting elderly people.
Democratic Representative Sean Casten of Illinois cited FBI data showing $388 million in reported losses. He said the actual amount was probably higher and called for requirements covering customer identification, transaction reporting and the registration of ATM locations.
Last year, FinCEN issued a notice warning that cryptocurrency ATMs were attractive to scammers and had high levels of non-compliance with anti-money laundering requirements.
“The crypto ATMs is something FinCEN has been very focused on,” Gacki said. She noted that their operators are money services businesses required to register with the agency.
Gacki declined to endorse specific legislation but said FinCEN would provide technical assistance to Congress.
Representative Bill Foster, also an Illinois Democrat, described how elderly victims withdraw their savings and deposit the cash into Bitcoin ATMs after being manipulated by scammers.
“They come in, they’re crying, they pour their life savings, or they ask for their life savings out in cash, and then they go next door and dump it into a Bitcoin ATM,” Foster said. “And then they come back two hours later and say, how do we get our money back?”
Foster asked FinCEN to examine whether states that ban cryptocurrency ATMs experience fewer scams than states that allow them. Some states have imposed transaction limits and other restrictions intended to protect customers.
The hearing also examined whether stablecoin issuers should intervene when stolen digital assets pass through their networks.
Foster cited an American Banker report saying North Korean hackers drained about $280 million from a cryptocurrency exchange on April 1 and moved the money through Circle Internet Group’s stablecoin network. He said Circle had the ability to freeze tokens at any wallet address but did not intervene.
Gacki said Treasury officials worked closely with stablecoin issuers, including Circle and Tether, to freeze and seize assets. She did not offer a conclusion on the incident.
“I’d like to understand this a little bit more before I can provide an answer,” she said.
Gacki also told lawmakers that financial institutions had filed more than 850,000 suspicious activity reports involving potential elder financial exploitation. Those filings represented more than $443 billion in reported suspicious activity.
–IANS
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