Lawmakers in the US state of Wisconsin are moving to impose stricter regulations on cryptocurrency ATMs in an effort to curb scams and excessive charges. On Monday, Senator Kelda Roys, joined by six other Democrats, introduced Senate Bill 386, a companion to Assembly Bill 384, filed in July by Representative Ryan Spaude.
An excerpt of Senate Bill 386 introduced on Monday. Source: Wisconsin Legislature
By filing identical bills in both the Senate and the Assembly, legislators aim to fast-track the process, allowing both chambers to consider the proposal at the same time. This approach increases the chances of the measure becoming law.
The bills respond to rising reports of fraud linked to crypto ATMs machines that allow people to buy or sell digital assets for cash but have been increasingly misused by scammers.
Mandatory Licensing and Strict ID Verification
Under the proposed rules, all crypto ATM and kiosk operators in Wisconsin would be required to hold a money-transmitting licence before doing business in the state.
Operators would also have to collect detailed customer information for every transaction, including:
Full name
Date of birth
Contact number
Residential address
Email address
Additionally, customers would have to present a government-issued ID, such as a passport or driver’s licence, and operators would be required to take a photo of the customer. This identity verification would be mandatory for every transaction, not just the first one.
The bills also include a transaction limit of $1,000 per person per day, aiming to reduce the risk of large-scale fraud.
Fee Caps and Consumer Protection Measures
One of the key concerns addressed is the high cost of using crypto ATMs. These machines often charge far more than online crypto exchanges. The new legislation proposes a fee cap, either a flat $5 charge or 3% of the transaction amount, whichever is higher.
The text of the warning proposed under the bill, which would be displayed on crypto ATMs if passed. Source: Wisconsin Legislature
Consumer protection is also at the heart of the proposals. If a transaction is later confirmed to be fraudulent such as a scam payment, operators would be obliged to fully reimburse the customer, provided law enforcement contacts the operator within 30 days.
Furthermore, the machines would have to display clear fraud warning labels “within the customer’s field of vision” to alert users to common scams.
FinCEN Warnings and Wider Crackdown
The proposals follow an August 4 warning from the US Treasury’s Financial Crimes Enforcement Network (FinCEN), which urged financial institutions to monitor and report suspicious crypto ATM transactions.
FinCEN highlighted three main illicit uses for the machines:
Fraud
Cybercrime
Drug trafficking
The agency also warned that elderly individuals are particularly at risk, often being tricked by criminals posing as bank staff, tech support agents, or customer service representatives.
Wisconsin’s move reflects a global trend towards tighter oversight of crypto ATMs. In July, New Zealand banned all crypto ATMs nationwide, citing their use in money laundering and criminal financing. In the UK, regulators have seized several machines and made arrests in connection with illegal operations. Even in small towns such as Grosse Pointe Farms, Michigan, local governments have pre-emptively passed restrictions despite not having any ATMs installed.
If passed, Wisconsin’s twin bills would set one of the most stringent frameworks for crypto ATM operations in the United States. By combining licensing requirements, strict verification rules, fee caps, and mandatory fraud warnings, lawmakers hope to reduce scams and protect consumers.
The move signals that crypto ATMs, once seen as a convenient bridge between cash and digital currencies are now under growing scrutiny worldwide. For operators, compliance costs are likely to rise; for customers, the aim is a safer, more transparent experience.
