Wisconsin Democrats introduced companion Senate Bill 386 weeks after filing Assembly Bill 384 to tighten regulations on crypto kiosks amid rising scam-related losses. The proposals require crypto kiosks and ATMs to have money transmission licenses, imposing additional regulations on current laws under the Department of Financial Institutions’ Division of Banking.
The proposals also require retail crypto spots to have strict KYC verifications and a daily transaction cap of $1,000 per customer. Fees will be capped at 3% or $5 of the amount transacted. The bills also required crypto kiosks and ATMs to display “Fraud Alert” warnings about scammers posing as loved ones, charities, or government representatives.
The Democratic lawmakers believe crypto terminals around most of the country’s grocery stores and gas stations need urgent control. Data from Coin ATM Radar showed that Wisconsin alone has nearly 582 Bitcoin ATMs .
The lawmakers said they were responding to a nationwide increase in fraud that cost victims almost $247 million in 2024. The proposals require refunds for scams reported within 30 days to be made available to the victims and allow law enforcement to track money, as in traditional banking.
Roys warns ‘exciting’ emerging tech invites scams
State Sen. Roys warned that although emerging tech could be “exciting,” it also invited scams or fraud. She hopes her fellow Senate members will “do something” about these rising crypto fraud cases this session.
Roys pointed out that many of these crypto kiosks resembling ATMs evade many regulations. The Senator added that States need to step up customer protection because crypto kiosk guardrails are less transparent or regulated than most people assume. She said she wants to see Wisconsin crypto consumers “protected too.”
Sergeant Scott Goldberg, an investigator at the Wood County Sheriff’s Department, claimed that victims were losing between $2,000 and upwards of $60,000 at a time in scams. He said fraud complaints at crypto kiosks started two years ago. However, he was concerned that how often they happened was not as important as how much was lost at a time.
“That’s the real concern. In Wood County, we’re probably an average-sized county in the state population-wise, so I can’t imagine what it is like down in Dane County or Milwaukee County, where the mass populations are, or in the Fox Valley, where there’s just a lot more people.”
– Sgt. Scott Goldberg , Investigator at the Wood County Sheriff’s Department
Goldberg complained that scams are taking place everywhere, but law enforcement is “handcuffed” to the extent to which it can help with such scams. However, he warned that consumers should be vigilant. People should pause, stop, and physically call banks and law enforcement agencies when they run into suspected fraud.
Kumar says bills help build public trust
Dileep Kumar, Director at Digital South Trust, said the bills aimed to build public trust, albeit limiting high-value trades. Kumar also noted that the bills could reduce anonymity but pave the way for safer and more credible crypto adoption in daily transactions.
Roys claimed that everyone wanted to spend their money however they chose without fear of losing it all to fraudsters. The co-founder of the Giottus crypto exchange, Arjun Vijay, pointed out that physical kiosks without strong KYC protocols are implicated in illicit activities and money laundering.
Wisconsin lawmakers emphasized they are proposing an anti-fraud bill, not an anti-crypto bill. The bills propose that kiosk operators collect and verify every individual’s full legal name, date of birth, telephone number, residence address, and email. The operators must also obtain a copy of an individual’s government-issued ID, passport, or driver’s license.
