Wisconsin Proposes New KYC Rules to Combat Crypto ATM Fraud

Overview

Wisconsin lawmakers have introduced two identical bills—Senate Bill 386 and its Assembly companion—aimed at strengthening oversight of Bitcoin ATMs, locally known as crypto kiosks.

In 2024, fraud complaints related to these machines surged by 99%, with victims reporting nearly $247 million in losses, according to FinCEN data. The proposed legislation includes identity verification protocols, transaction limits, and consumer safeguards to tackle this alarming rise in scams. 

Key Components of the Proposed Bills

• Strict KYC (Know Your Customer) Measures: Every ATM transaction, regardless of size, would require a government-issued photo ID along with additional personal information (name, date of birth, address, contact details).
• Daily Transaction Caps: Users would be limited to $1,000 per day. Operator fees would also be capped—either $5 per transaction or 3%, whichever is greater.
• Fraud Prevention & Reporting Protections: ATMs must display clear warnings about common fraud schemes. Victims reporting fraud within 30 days could be eligible for refunds, a measure aimed at protecting the most vulnerable users.
• Licensing & Oversight: ATM operators would be required to obtain a money transmitter license and report to state regulatory authorities to improve transparency and legal accountability.

Global Context

Although this initiative is driven by local concerns in Wisconsin, crypto ATM fraud is a growing global phenomenon—affecting users across North America, Europe, Asia, and elsewhere. States’ efforts, such as Wisconsin’s, could help shape best practices and regulatory frameworks worldwide.

Coinccino Insight

“Cryptocurrency ATMs offer convenience—but convenience without proper checks can expose users to major risk. Wisconsin’s approach strikes a regulatory balance: enhancing protection while preserving accessibility. If passed, these bills may become a template for other jurisdictions tackling crypto-related crime.”