119-s710

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 710 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 710

 To amend title 31, United States Code, to prevent fraudulent 
 transactions at virtual currency kiosks, and for other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 February 25, 2025

 Mr. Durbin (for himself, Mr. Blumenthal, Mr. Reed, and Mr. Welch) 
introduced the following bill; which was read twice and referred to the 
 Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

 A BILL

 To amend title 31, United States Code, to prevent fraudulent 
 transactions at virtual currency kiosks, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Crypto ATM Fraud Prevention Act of 
2025''.

SEC. 2. REGISTRATION WITH THE SECRETARY OF THE TREASURY.

 

Section 5330 of title 31, United States Code, is amended--

    (1) in subsection
            (d) --
        (A) in paragraph

    (1)
        (A) , by inserting ``, any 
 person who owns, operates, or manages a virtual 
 currency kiosk in the United States or its 
 territories,'' after ``similar instruments''; and
        (B) by adding at the end the following:
 ``

    (3) Virtual currency; virtual currency address; virtual 
 currency kiosk; virtual currency kiosk operator.--The terms 
 `virtual currency', `virtual currency address', `virtual 
 currency kiosk', and `virtual currency kiosk operator' have the 
 meanings given those terms, respectively, in 

section 5337.''; 
 and

    (2) by adding at the end the following:
 ``

    (f) Registration of Virtual Currency Kiosk Locations.--
 ``

    (1) In general.--Not later than 90 days after the 
 effective date of this subsection, and not less than once every 
 90 days thereafter, the Secretary of the Treasury shall require 
 virtual currency kiosk operators to submit an updated list 
 containing the physical address of each virtual currency kiosk 
 owned or operated by the virtual currency kiosk operator.
 ``

    (2) Form and manner of registration.--Each submission by 
 a virtual currency kiosk operator pursuant to paragraph

    (1) shall include--
 ``
        (A) the legal name of the virtual currency kiosk 
 operator;
 ``
        (B) any fictitious or trade name of the virtual 
 currency kiosk operator;
 ``
            (C) the physical address of each virtual currency 
 kiosk owned, operated, or managed by the virtual 
 currency kiosk operator that is located in the United 
 States or the territories of the United States;
 ``
            (D) the start date of operation of each virtual 
 currency kiosk;
 ``
        (E) the end date of operation of each virtual 
 currency kiosk, if applicable; and
 ``
        (F) each virtual currency address used by the 
 virtual currency kiosk operator.
 ``

    (3) False and incomplete information.--The filing of 
 false or materially incomplete information in a submission 
 required under paragraph

    (1) shall be deemed a failure to 
 comply with the requirements of this subsection.''.

SEC. 3. PREVENTING FRAUDULENT TRANSACTIONS AT VIRTUAL CURRENCY KIOSKS.

    (a) In General.--Subchapter II of Chapter 53 of Title 31, United 
States Code, is amended by adding at the end the following:
``

Sec. 5337. Virtual currency kiosk fraud prevention
 ``

    (a) 

=== Definitions. ===
-In this section:
 ``

    (1) Blockchain analytics.--The term `blockchain 
 analytics' means the analysis of data from blockchains or 
 public distributed ledgers, and associated transaction 
 information, to provide risk-specific information about virtual 
 currency transactions and virtual currency addresses.
 ``

    (2) Customer.--The term `customer' means any person that 
 purchases or sells virtual currency through a virtual currency 
 kiosk.
 ``

    (3) Existing customer.--The term `existing customer' 
 means a customer other than a new customer.
 ``

    (4) FinCEN.--The term `FinCEN' means the Financial Crimes 
 Enforcement Network of the Department of the Treasury.
 ``

    (5) New customer.--The term `new customer', with respect 
 to a virtual currency kiosk operator, means a customer during 
 the 14-day period beginning on the date of the first virtual 
 currency kiosk transaction of the customer with the virtual 
 currency kiosk operator.
 ``

    (6) Transaction hash.--The term `transaction hash' means 
 a unique identifier made up of a string of characters that act 
 as a record of and provide proof that a transaction was 
 verified and added to the blockchain.
 ``

    (7) Virtual currency.--The term `virtual currency' means 
 any digital representation of value that is recorded on a 
 cryptographically secured distributed ledger or any similar 
 technology or another implementation, which was designed and 
 built as part of a system to leverage or replace blockchain, 
 distributed ledger technology, or their derivatives.
 ``

    (8) Virtual currency address.--The term `virtual currency 
 address' means an alphanumeric identifier associated with a 
 virtual currency wallet identifying the location to which 
 virtual currency purchased through a virtual currency kiosk can 
 be sent or from which virtual currency sold through a virtual 
 currency kiosk can be accessed.
 ``

    (9) Virtual currency kiosk.--The term `virtual currency 
 kiosk' means a stand-alone machine that is capable of accepting 
 or dispensing legal tender in exchange for virtual currency.
 ``

    (10) Virtual currency kiosk operator.--The term `virtual 
 currency kiosk operator' means a person who owns, operates, or 
 manages a virtual currency kiosk located in the United States 
 or its territories.
 ``

    (11) Virtual currency kiosk transaction.--The term 
 `virtual currency kiosk transaction' means the purchase or sale 
 of virtual currency via a virtual currency kiosk.
 ``

    (12) Virtual currency wallet.--The term `virtual currency 
 wallet' means a software application or other mechanism 
 providing a means for holding, storing, and transferring 
 virtual currency.
 ``

    (b) Disclosures.--Before entering into a virtual currency 
transaction with a customer, a virtual currency kiosk operator shall 
disclose in a clear, conspicuous, and easily readable manner--
 ``

    (1) all relevant terms and conditions of the virtual 
 currency kiosk transaction, including--
 ``
        (A) the amount of the virtual currency kiosk 
 transaction;
 ``
        (B) the type and nature of the virtual currency 
 kiosk transaction;
 ``
            (C) a warning that the virtual currency kiosk 
 transaction is final, is not refundable, and may not be 
 reversed; and
 ``
            (D) the type and amount of any fees or other 
 expenses paid by the customer;
 ``

    (2) a warning relating to consumer fraud including--
 ``
        (A) a warning that consumer fraud often starts 
 with contact from a stranger, and that the customer 
 should never send money to someone they do not know;
 ``
        (B) a warning about the most common types of 
 fraudulent schemes involving virtual currency kiosks, 
 such as--
 ``
            (i) impersonation of a government 
 official or a bank representative;
 ``
            (ii) threats of jail time or financial 
 penalties;
 ``
            (iii) offers of a job or reward in 
 exchange for payment, or offers of deals that 
 seem too good to be true;
 ``
            (iv) claims of a frozen bank account or 
 credit card; or
 ``
            (v) requests for donations to charity or 
 disaster relief; and
 ``
            (C) a statement that the customer should contact 
 the virtual currency kiosk operator's customer service 
 helpline or State or local law enforcement if they 
 suspect fraudulent activity.
 ``
            (c) Acknowledgment of Disclosures.--Each time a customer uses a 
virtual currency kiosk, the virtual currency kiosk operator shall 
ensure acknowledgment of all disclosures required under subsection

    (b) via confirmation of consent of the customer at the virtual currency 
kiosk.
 ``
            (d) Receipts.--Upon completion of each virtual currency kiosk 
transaction, the virtual currency kiosk operator shall provide the 
customer with a receipt, which shall include the following information:
 ``

    (1) The name and contact information of the virtual 
 currency kiosk operator, including a telephone number for a 
 customer service helpline.
 ``

    (2) The name of the customer.
 ``

    (3) The type, value, date, and precise time of the 
 virtual currency kiosk transaction, transaction hash, and each 
 applicable virtual currency address.
 ``

    (4) The amount of the virtual currency kiosk transaction 
 expressed in United States dollars.
 ``

    (5) All fees charged.
 ``

    (6) A statement that the customer may be entitled by law 
 to a refund if the customer reports fraudulent activity in 
 conjunction with the virtual currency kiosk transaction not 
 later than 30 days after the date of the virtual currency kiosk 
 transaction.
 ``

    (7) The refund policy of the virtual currency kiosk 
 operator or a Uniform Resource Locator where the refund policy 
 of the virtual currency kiosk operator can be found.
 ``

    (8) A statement that the customer should contact law 
 enforcement if they suspect fraudulent activity, such as scams, 
 including contact information for a relevant law enforcement or 
 government agency.
 ``

    (9) Any additional information the virtual currency kiosk 
 operator determines appropriate.
 ``

    (e) Physical Receipts Required.--Not later than 1 year after the 
effective date of this section, each receipt required under subsection
            (d) shall be issued to the customer as a physical receipt at the 
virtual currency kiosk at the time of the virtual currency kiosk 
transaction, but such receipt may also be provided in additional forms 
or communications.
 ``

    (f) Anti-Fraud 

=== Policy ===
-
 ``

    (1) In general.--Each virtual currency kiosk operator 
 shall take reasonable steps to detect and prevent fraud, 
 including establishing and maintaining a written anti-fraud 
 policy that includes--
 ``
        (A) the identification and assessment of fraud-
 related risk areas;
 ``
        (B) procedures and controls to protect against 
 risks identified under subparagraph
        (A) ;
 ``
            (C) allocation of responsibility for monitoring 
 the risks identified under subparagraph
        (A) ; and
 ``
            (D) procedures for the periodic evaluation and 
 revision of the anti-fraud procedures, controls, and 
 monitoring mechanisms under subparagraphs
        (B) and
            (C) .
 ``

    (2) Submission of anti-fraud policy to fincen.--Each 
 virtual currency kiosk operator shall submit to FinCEN the 
 anti-fraud policy required under paragraph

    (1) not later than 
 90 days after the later of--
 ``
        (A) the effective date of this section; or
 ``
        (B) the date on which the virtual currency kiosk 
 operator begins operating.
 ``

    (g) Appointment of Compliance Officer.--Each virtual currency 
kiosk operator shall designate and employ a compliance officer who--
 ``

    (1) is qualified to coordinate and monitor compliance 
 with this section and all other applicable Federal and State 
 laws, rules, and regulations;
 ``

    (2) is employed full-time by the virtual currency kiosk 
 operator;
 ``

    (3) is not the chief executive officer of the virtual 
 currency kiosk operator; and
 ``

    (4) does not own or control more than 20 percent of any 
 interest in the virtual currency kiosk operator.
 ``

    (h) Use of Blockchain Analytics.--
 ``

    (1) In general.--Each virtual currency kiosk operator 
 shall use blockchain analytics to prevent sending virtual 
 currency to a virtual currency wallet known to be affiliated 
 with fraudulent activity at the time of a virtual currency 
 kiosk transaction and to detect transaction patterns indicative 
 of fraud or other illicit activities.
 ``

    (2) Compliance.--The Director of FinCEN may request 
 evidence from any virtual currency kiosk operator to confirm 
 compliance with this subsection.
 ``
            (i) Verbal Confirmation Required Before New Customer 
Transactions.--
 ``

    (1) In general.--Before entering into a virtual currency 
 kiosk transaction valued at 500 dollars or more with a new 
 customer, a virtual currency kiosk operator shall obtain verbal 
 confirmation from the new customer that--
 ``
        (A) the new customer wishes to proceed with the 
 virtual currency kiosk transaction;
 ``
        (B) the new customer understands the nature of 
 the virtual currency kiosk transaction; and
 ``
            (C) the new customer is not being fraudulently 
 induced to engage in the transaction.
 ``

    (2) Reasonable effort.--A virtual currency kiosk operator 
 shall make a reasonable effort to determine whether the 
 customer is being fraudulently induced to engage in the virtual 
 currency kiosk transaction.
 ``

    (3) Method of confirmation.--Each verbal confirmation 
 required under paragraph

    (1) shall be given by way of a live 
 telephone or video call to a person employed by, or on behalf 
 of, the virtual currency kiosk operator.
 ``

    (j) Refunds.--
 ``

    (1) In general.--
 ``
        (A) New customers.--Not later than 30 days after 
 receiving an application under paragraph

    (2) , a virtual 
 currency kiosk operator shall issue a refund to a 
 customer for the full amount of each virtual currency 
 kiosk transaction, including the dollar value of 
 virtual currency exchanged and all transaction fees, 
 made during the period in which the customer was a new 
 customer and for which the customer was fraudulently 
 induced to engage in the virtual currency kiosk 
 transaction.
 ``
        (B) Existing customers.--Not later than 30 days 
 after receiving an application under paragraph

    (2) , a 
 virtual currency kiosk operator shall issue a refund to 
 a customer for the full amount of all transaction fees 
 associated with each virtual currency kiosk transaction 
 made during the period in which the customer was an 
 existing customer and for which the customer was 
 fraudulently induced to engage in the virtual currency 
 kiosk transaction.
 ``

    (2) Application.--A customer seeking a refund under 
 paragraph

    (1) shall, not later than 30 days after the date of 
 the virtual currency kiosk transaction, submit an application 
 to the virtual currency kiosk operator that includes the 
 following:
 ``
        (A) The name, address, and phone number of the 
 customer.
 ``
        (B) The transaction hash of the virtual currency 
 kiosk transaction or information sufficient to 
 determine the type, value, date, and time of the 
 virtual currency kiosk transaction.
 ``
            (C) A copy of a report to a State or local law 
 enforcement or government agency, made not later than 
 30 days after the virtual currency kiosk transaction, 
 that includes a sworn affidavit attesting that the 
 customer was fraudulently induced to engage in the 
 virtual currency kiosk transaction.
 ``

    (3) Enhanced damages.--Any person who willfully denies a 
 refund to a customer in violation of paragraph

    (1) shall be 
 liable to the customer for 3 times the amount of the refund 
 owed under that paragraph or $10,000, whichever is greater. A 
 penalty under this paragraph shall be in addition to any 
 penalty under subsection

    (n) .
 ``

    (k) Transaction Limits With Respect to New Customers.--
 ``

    (1) In a 24-hour period.--A virtual currency kiosk 
 operator shall not accept more than $2,000, or the equivalent 
 amount in virtual currency, from any new customer during any 
 24-hour period.
 ``

    (2) Total.--A virtual currency kiosk operator shall not 
 accept a total of more than $10,000, or the equivalent amount 
 in virtual currency, from any new customer.
 ``
            (l) Customer Service Helpline.--Each virtual currency kiosk 
operator shall provide live customer service during all hours that the 
virtual currency kiosk operator accepts virtual currency kiosk 
transactions, the phone number for which is regularly monitored and 
displayed in a clear, conspicuous, and easily readable manner upon each 
virtual currency kiosk.
 ``
            (m) Communications With Law Enforcement.--
 ``

    (1) In general.--Each virtual currency kiosk operator 
 shall provide a dedicated and frequently monitored phone number 
 and email address for relevant law enforcement and government 
 agencies to facilitate communication with the virtual currency 
 kiosk operator in the event of reported or suspected fraudulent 
 activity.
 ``

    (2) Submission.--Not later than 90 days after the 
 effective date of this section, each virtual currency kiosk 
 operator shall submit the phone number and email address 
 described in paragraph

    (1) to FinCEN and all other relevant law 
 enforcement and government agencies.
 ``

    (n) Civil Penalties.--
 ``

    (1) In general.--Any person who fails to comply with any 
 requirement of this section, or any regulation prescribed under 
 this section, shall be liable to the United States for a civil 
 monetary penalty of $10,000 for each such violation.
 ``

    (2) Continuing violation.--Each day that a violation 
 described in paragraph

    (1) continues shall constitute a 
 separate violation for purposes of such paragraph.
 ``

    (3) Assessments.--Any penalty imposed under this section 
 shall be assessed and collected by the Secretary of the 
 Treasury as provided in 

section 5321 and any such assessment 
 shall be subject to the provisions of that section.
 ``

    (o) Relationship to State Laws.--The provisions of this section 
shall preempt any State law, rule, or regulation only to the extent 
that such State law, rule, or regulation conflicts with a provision of 
this section. Nothing in this section shall be construed to prohibit a 
State from enacting a law, rule, or regulation that provides greater 
protection to customers than the protection provided by the provisions 
of this section.''.

    (b) Clerical Amendment.--The table of sections for chapter 53 of 
title 31, United States Code, is amended by inserting after the item 
relating to 

section 5336 the following:

``5337. Virtual currency kiosk fraud prevention.''.

SEC. 4. EFFECTIVE DATE.

 The amendments made by this Act shall take effect 90 days after the 
date of enactment of this Act.
 <all>