During remarks on the Senate floor Tuesday, Sen. Dick Durbin (D-IL) spoke about cryptocurrency fraud schemes.
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00:00Mr. President, yesterday the Senate voted to begin consideration of the modestly named
00:05Genius Act, a bill that would regulate stable coins, a form of cryptocurrency.
00:13Crypto is known as a volatile investment and more unpredictable than traditional financial
00:18assets like stocks and bonds.
00:21Last month, the value of Bitcoin, a type of crypto, dropped to $76,000.
00:28But it shot up to more than $100,000 last week.
00:33Supporters of the Genius Act say that's where stable coins come in.
00:38They argue that stable coins are tied to the value of a dollar, for example, so they never
00:43lose their value.
00:45The name stable coin makes it sound secure, doesn't it?
00:49But the name is misleading.
00:51In 2023 alone, stable coins deviated from their underlying asset more than 600 times.
00:58That does not sound like stability to me.
01:01While I agree with supporters of the Genius Act that crypto and stable coins need to be
01:05regulated, I have genuine concerns about the bill.
01:10One is the amount of illicit finance that stable coins could support.
01:14A recent report found that crypto facilitated $51 billion in illicit transactions, and stable coins accounted
01:23for 63% of all illicit crypto transactions.
01:28Many illegal transactions, crypto transactions, involve crypto ATMs.
01:36You might have seen one at your grocery store or gas station, though you may not realize it.
01:41They allow you to trade in cash for cryptocurrency, but they also are a frequent tool of scammers
01:50and fraudsters who prey on Americans, especially senior citizens.
01:55We receive phone calls in our offices back in Illinois on a regular basis from senior citizens
02:02who've been scammed out of thousands of dollars.
02:05Here's how it works.
02:06A scammer will call an unassuming victim, pretending to be from the government, or the victim's bank.
02:13Let me stop right there and say what I tell people over and over again.
02:17The government is not going to call you on the phone.
02:20If anyone calls you on the phone and represents that they're part of Social Security or some other federal agency,
02:28it is most likely a scam.
02:30That's the starting point.
02:32A scammer calls this unassuming victim and creates a scenario, an emergency scenario, in their minds.
02:39The scammer tells the victim that they owe money for skipping jury duty, for unpaid taxes,
02:44or that their bank account is frozen.
02:47The scammer warns the victim they've got to pay urgently or else the fines will escalate
02:52and the victim may face jail time if they don't move quickly.
02:56The scammer tells the victim not to worry.
02:59They can simply drive to the nearest crypto ATM, make their payment, and everything will be just fine.
03:06The scammer walks them through the steps of inserting cash in the machine,
03:13purchasing cryptocurrency, and sending it to the scammer's digital wallet.
03:17Once that happens, the money is gone with no way to get it back,
03:22and little hope of tracing the transaction to the scammer.
03:26All throughout the scam, the fraudster will stay in constant contact with the victim
03:30to keep them from ever getting a moment to take a breath, calm down, consult a trusted friend,
03:36or maybe realize what's really going on.
03:38In 2023, scammers used crypto ATMs to cheat victims out of $114 million, mainly senior citizens.
03:49I first found out about these scams after reading an article in the Illinois Times,
03:54a newspaper publication in Springfield, Illinois.
03:57The article told the story of a vape shop owner in Springfield
04:01who was being paid $300 a month to have a crypto ATM machine on his premises.
04:07One day, the owner noticed a panicked elderly woman enter the shop,
04:12hurriedly feed thousands of dollars into the crypto ATM while talking on the phone the whole time.
04:19The vape shop owner learned that the woman was scammed out of $5,000
04:22before he stepped in to stop her from putting more money into the machine.
04:27Later, the owner removed the crypto ATM from his store,
04:31but there was no way for the woman to get her money back.
04:33That owner said,
04:34I just couldn't in good conscience allow more and more senior citizens
04:38to come in and use that machine after being scammed.
04:41This same story has repeated itself countless times across the country.
04:46An 80-year-old man in Texas lost thousands of dollars to a scammer
04:50who claimed he needed to pay bail to get his son out of jail.
04:54The man claimed, quote,
04:55In South Carolina, a retired couple lost $320,000
05:05over several months to a scam involving crypto ATMs.
05:10Last month, a retired woman in Wisconsin lost $24,000
05:14her entire life savings
05:16when scammers convinced her to use a crypto ATM
05:19claiming it was the only way to protect her bank account
05:22from fraudulent activity.
05:24Since the scam, the woman has said,
05:26Sometimes I wake up and I shiver
05:27because I still hear that scammer's voice.
05:30It's probably something I'll never get over.
05:33Just this month,
05:34the sheriff's office in Walton County, Florida
05:36reported that the resident was cheated out of $129,000
05:41by a scammer claiming to be from their bank.
05:44Crypto ATM operators will claim
05:46that their kiosks give banking and crypto access
05:49to the unbanked,
05:51often those in minority and low-income communities
05:54who have historically been locked out of the banking system.
05:57But in reality,
05:58the elderly and unbanked are the most vulnerable
06:01to scams involving crypto ATM fraud.
06:04And crypto ATMs charge high fees
06:06ranging from 7% to 20%
06:09and have fewer customer protections, if any, for the users.
06:13States such as Nebraska, Arizona, and Connecticut
06:16have passed legislation to crack down on these scams.
06:20It's time for Congress to do the same.
06:22It's been predicted that the result of the so-called Genius Act
06:26is a dramatic increase in crypto activity.
06:29That means dramatic exposure to fraud.
06:32Let's make sure this amendment,
06:34which I'm going to offer to the Genius Act,
06:36is adopted to protect innocent victims.
06:39I can tell you for sure,
06:41you're going to hear from senior citizens and others
06:43who have lost their life savings.
06:45That's why I'm pushing for a vote on my amendment
06:47to the Genius Act.
06:49It creates common-sense guardrails
06:50to prevent crypto ATM fraud
06:52and empower law enforcement to combat these scams.
06:56My amendment, based on the Crypto ATM Fraud Prevention Act,
06:59would require crypto ATM operators
07:02to warn consumers about scams,
07:05provide live customer support,
07:08develop comprehensive anti-fraud policies.
07:10With my amendment, fewer Americans will be cheated out
07:14of their entire retirement savings in just a few days,
07:17and ATM operators would no longer be able
07:19to simply turn a blind eye to the fraud at their kiosks.
07:23These scams have already harmed thousands of Americans
07:26and cheated them out of their life savings.
07:28Enough is enough.
07:30I urge my colleagues on both sides of the aisle,
07:33listen to the people you represent,
07:34particularly the senior citizens
07:36who are losing their life savings to these scams,
07:39and realize that with 30,000 crypto ATMs across the country,
07:44more and more of this will occur.
07:46We need to support this amendment
07:48that provides common-sense guardrails
07:50to stop scammers in their tracks
07:52and protect hard-working Americans.
07:55Mr. President, I yield the floor.
07:56Mr. President, I yield the floor.