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Committee hears concerns about crypto, DeFi and Bitcoin ATMs as scam cash‑out channels

5785120 · September 19, 2025

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Summary

Members and witnesses discussed the role of cryptocurrency, unhosted wallets and Bitcoin ATMs in enabling fraud and called for clearer regulation, parity of law‑enforcement powers and consumer education on crypto risks.

Members of the House subcommittee and witnesses discussed how cryptocurrency and decentralized finance (DeFi) can be used by fraudsters to receive and launder stolen funds, and they urged stronger oversight and law‑enforcement tools.

Representative David Liccardo and others questioned how to address scams facilitated by unhosted wallets and DeFi protocols that make identification and recovery difficult. Carla Sanchez Adams recommended extending legal protections and supervisory reach so that payment rails used in crypto are subject to consumer protections, including updating EFTA coverage to apply to such transfers and to fraudulently induced transactions.

Witnesses also flagged Bitcoin ATMs as a common cash‑out method for scams targeting seniors. Paul Benda cited a Washington, D.C. enforcement action where a Bitcoin operator’s ATM transactions were 93% fraudulent, with an average victim age of 71 and average loss of about $8,000 per incident. Kate Griffin urged parity in law‑enforcement authorities for digital assets, including civil forfeiture and clarified Secret Service authorities, and recommended investigating crypto ATMs placed in vulnerable settings such as convenience stores and retirement facilities.

Panelists discussed the House Clarity Act (described in testimony as clarifying KYC/AML for centralized exchanges) as helpful for centralized operators but noted DeFi and unhosted wallets present additional cross‑border enforcement and identification challenges. Witnesses and members asked for follow‑up on legislative fixes and for consumer education to highlight the risks of sending crypto.