Wisconsin is considering new regulations to protect residents from crypto ATM scams

Wisconsin is currently considering new laws to protect its residents from the menace of crypto scams. According to reports, residents in Wisconsin have lost thousands to the growing crypto scam, showing the need for better regulations that aim to protect them from losing more.

The sheriff’s office in central Wisconsin also discussed the rise in fraud related to Bitcoin in the region, noting that one person lost as much as $40,000 in a single case. “Having these restrictions is only going to provide financial safety for our Community, and we’re super excited that someone’s moving forward with that,” said Investigative Lt. Scott Goldberg.

Wisconsin set to unveil new laws to tackle crypto scams

According to a newly proposed law, Bitcoin Treasury Machines are expected to be restricted, which means that if someone loses funds through one of these machines, the cryptocurrency company will refund the victim. In addition, the newly proposed regulation will also require every cryptocurrency machine company to post signs warning users about fraudulent transactions. Under the bill, only $1,000 in BTC can be sent at in a day, and fees charged by crypto firms will be reduced per transaction.

Cryptocurrency fraud has been on the rise in the past few years, and fraud prevention experts have pointed to crypto ATMs as one of the favorite tools that scammers are now using to facilitate their crime. This is because these machines do not undergo the same regulatory process as traditional ATMs, and victims are not covered under any type of insurance for losses.

“There’s no recovery, so that’s what makes these really, really difficult,” Scott Reeder, a loss prevention manager at UW Credit Union, said. “You can do police reports, but it’s just a dead end. There’s so much of this going on that there’s no resources to even look into recovering these funds.” In the past year, victims lost about $247 million to scams involving crypto ATMs, according to the FBI. The report also showed that the number of complaints the FBI received in 2024 over scams on crypto ATMs doubled.

“Five years ago, we hardly ever heard about these, and it’s been a constant incline since, and it’s getting more and more prevalent,” Reeder said. According to authorities, a West Allis native who did not want to reveal her name due to privacy concerns reportedly lost $850 to a scam via a cryptocurrency ATM. Authorities claimed that the woman received a call from a man claiming to be a police officer with a warrant for her arrest.

The woman said that the man said she had failed to appear in court, noting that it could be as a result of her aged mother misplacing the summons. “My mom has Alzheimer’s, and when he said the signature — he couldn’t make out — I thought it was my mom’s signature. So, I believed it right then and there,” she said. She added that she tried to investigate the claim, but every time she questioned him, he always dropped a subtle threat about her going to prison.

She added that the scammer provided fake court paperwork to back his claim, asking her to clear up the situation by paying the fees she owed. To avoid being arrested, the man said she should wire the money from a nearby crypto ATM. “I knew nothing about Bitcoins,” Amy said. “I put the money in, and when I got back to the car, he proceeded to say he forgot something and wanted more money. And that’s when I snapped, and then he hung up the phone. And that’s when I knew I got scammed.”

State Rep. Ryan Spaude, who authored the bill alongside Senator Kelda Roys, said if all the things proposed in the bill are adhered to, the rate of being defrauded via a crypto ATM drops drastically. “Cryptocurrency is here and actively being used — and we need to take steps to stop Wisconsinites from getting screwed,” Roys said. The Wisconsin Legislature is largely controlled by the Republicans, and without their support, the proposal may not become law.

The next best thing for the sponsors of the bill is to look for cosponsors and hope to see bipartisan support for regulations for crypto ATMs. Meanwhile, Reeder has issued a warning to Wisconsin residents, urging them to stop and think before sending money to someone they have never met before using a crypto ATM under any circumstances. “If something just doesn’t make sense, you know, slow down. Ask for advice. Ask your financial: ‘Hey, does this make sense?’” he said.

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