Chicago Launches Bitcoin POP to Replace Unregulated Crypto ATMs Citywide
Key Takeaways
- Chicago launched Bitcoin POP to replace unregulated crypto ATMs.
- The move targets fraud linked to cash-based crypto transactions.
CHICAGO (EtherX) Chicago officials launched Bitcoin POP to
replace unregulated crypto ATMs, driving bitcoin news as the city moves to curb
fraud and tighten oversight of cash-based cryptocurrency transactions.
Why
This Matters
City regulators identified more than
1,200 crypto ATMs operating without permits across Chicago, according to the
Department of Business Affairs. Those machines were linked to $12.4 million in
reported consumer losses since 2023, largely tied to scam-related payments.
Complaints involving crypto ATMs
rose 38% last year, city data show, with many victims reporting limited options
to recover lost funds once cash transactions were completed.
What
Is Bitcoin POP
Bitcoin POP is a regulated kiosk
system approved by the city and operated by licensed vendors. The machines
require identity verification, apply transaction limits, and transmit
transaction data to regulators in real time.
City officials said the system is
designed to replace standalone crypto ATMs that allowed anonymous cash
transactions with minimal oversight.
“We have seen residents lose
thousands of dollars with no accountability,” Mayor Brandon Johnson said. “This
program closes gaps that allowed abuse.”
Enforcement
and Compliance
Unlicensed crypto ATMs will be
ordered offline beginning July 15. Operators who fail to remove or convert
machines face fines of $5,000 per machine, according to enforcement guidelines
released Tuesday.
The city said inspections will focus
on convenience stores, gas stations, and liquor shops where many machines were
previously installed.
Officials said licensed Bitcoin POP
operators must comply with ongoing audits and consumer disclosure requirements
to retain approval.
Consumer
Impact
Consumer advocates said the shift
could reduce losses among seniors and first-time crypto users, who account for
a large share of reported complaints.
“These machines were often used as
payment tools in scams,” said Denise Miller, policy director at the Midwest
Consumer Federation. “Limits and verification change that dynamic.”
The city said Bitcoin POP kiosks
will display clear fee structures and warnings about common scam tactics before
transactions are completed.
Industry
Response
Several crypto ATM operators said
they are reviewing the new framework. Some smaller operators are expected to
exit the Chicago market rather than retrofit machines to meet compliance
standards.
A spokesperson for one national
operator declined to comment on whether it plans to convert existing machines
to the Bitcoin POP system.
Oversight
Role
The Illinois Attorney General’s
office said it is coordinating with city regulators to track fraud trends
following the rollout. Officials said transaction data from Bitcoin POP kiosks
will support faster investigations when complaints are filed.
State officials said Chicago’s
program could inform broader regulatory standards if results show a decline in
fraud-related losses.
Market Reaction:
City officials expect state
lawmakers to consider legislation later this summer that could expand Bitcoin
POP-style standards statewide. Regulators will review transaction data and
consumer complaints over the next six months to determine whether the program
reduces losses tied to crypto ATM scams.
