Alabama’s New Crypto ATM Scam Refund Requirements Take Effect

Alabama Scam Victims Get Refund Rights With a 60-Day Deadline

An urgent call about a supposed warrant or bank problem can send someone to a crypto ATM, where the money may be difficult to recover. Alabama now requires kiosk operators to reimburse qualifying scam victims under House Bill 303, the Cryptocurrency Kiosk Fraud Prevention Act. Sponsored by state Rep. Russell Bedsole, the measure was enacted April 8 and took effect Oct. 1.

The amount a victim can recover depends on whether the law classifies that person as a new or existing customer. The Alabama Securities Commission (ASC), the state’s securities regulator, outlined the refund requirements Sept. 30: full reimbursement plus all fees for qualifying new users, or half the payment’s value plus all fees for existing consumers.

Eligibility for the larger refund extends through a customer’s first cryptocurrency kiosk transaction and the 30 days immediately afterward. Users outside that period fall into the existing-consumer category. Both groups must notify the operator, a law enforcement agency, and the ASC within 60 calendar days after the disputed payment, then file a fraud report with either law enforcement or the commission.

The reporting process addresses losses after a scam, while the commission’s warning focuses on recognizing suspicious payment demands before money moves. Alabama Securities Commission Director Amanda Senn said:

“ATMs are traditionally used to withdraw money. If someone is directing you to deposit money into a crypto ATM, you are likely being scammed.”

New Users Face Limits, Required Fraud Warnings

Beyond reimbursement, the law places limits on the amount customers can send through machines that exchange cash for cryptocurrency. For new consumers, House Bill 303 sets limits of $1,000 per calendar day and $10,000 per calendar month. Existing consumers face a separate $10,500 daily ceiling.

Using another machine operated by the same business does not allow a new customer to exceed the $1,000 daily or $10,000 monthly cap. The new-customer limits apply across one or multiple kiosks in Alabama, with identity verification required for each payment. Operators headquartered in the United States also must provide live, U.S.-based, toll-free customer service at all times. Violations can result in civil penalties.

The restrictions are accompanied by disclosures intended to show customers what they are paying and identify possible fraud. Before processing a payment, businesses must display fees, amounts in cryptocurrency and U.S. dollars, and exchange-rate information comparing the market price with the price charged. The ASC also described questions designed to alert users to scams.

Those warnings address the pressure tactics that can turn a fabricated legal obligation into an immediate cryptocurrency payment. A Georgia woman deposited $4,900 into a bitcoin ATM after a fake jury duty threat, according to local reporting published Sept. 16. The caller told her she needed to pay to avoid arrest.

Other schemes develop more gradually, with a supposed romantic partner building trust before requesting money or resorting to threats and blackmail. Impersonation and fabricated emergencies are among the bitcoin fraud and scam tactics used to solicit transfers. The agency identified senior citizens as frequent targets and warned that immediate, irreversible payments complicate recovery.

Even with transaction limits, disclosures, and reimbursement requirements, the commission cautioned that fraudsters would continue trying to steal money. Senn acknowledged that Alabama’s law would not eliminate scam attempts, but would limit financial losses through protections and refunds.

Alabama Recorded Nearly $3 Million in Kiosk-Related Scam Losses

The financial exposure behind Alabama’s safeguards appears in federal complaint data covering scams that involved cryptocurrency kiosks. The Federal Bureau of Investigation (FBI) recorded 177 Alabama complaints and nearly $3 million in reported losses during 2025, while nationwide losses approached $389 million across 13,460 complaints. Some cases included other payment methods, so the totals cannot be attributed entirely to kiosks.

Refund requirements have already produced recoveries in Arizona, where a separate law establishes its own eligibility and reporting conditions. Arizona Attorney General Kris Mayes announced on Aug. 12 that 35 crypto ATM fraud victims received $171,332 in full refunds. Arizona’s mandatory refund protection covers customers who had been with an operator for fewer than 10 days.

Federal lawmakers have also pursued nationwide safeguards addressing transaction limits, warnings, records, and refunds of charges collected by operators. H.R. 9268, the Stop Crypto ATM Scams Act, was introduced June 11 and would preserve state authority to adopt further protections.