Bitcoin ATM fraudsters pocketed $65 million in the first half of 2024
A recent report by the Federal Trade Commission (FTC) highlighted a significant increase in losses to Bitcoin ATM scams. The FTC disclosed that the amount of money lost to these scams surged nearly tenfold from 2020 to 2023, skyrocketing from $12 million to a staggering $114 million. In the first half of 2024 alone, consumers have already fallen victim to losses totaling $65 million.
Over time, scams have taken various forms but fundamentally involve deceiving individuals into transferring money to scammers. From persuading victims to send wire transfers to purchasing gift cards or even handing over cash in a shoebox, scammers have continuously adapted their tactics. The latest iteration involves Bitcoin ATMs.
Bitcoin ATMs are physical machines located in places like gas stations and grocery stores that allow users to buy or sell cryptocurrencies. Scammers typically initiate contact with victims via phone, text, or online pop-ups, posing as bank or government officials. They then fabricate scenarios where victims are led to believe their bank accounts are compromised, coercing them to take immediate action.
In this scheme, scammers instruct victims to withdraw a substantial amount of cash and deposit it into a Bitcoin ATM, which they may refer to as “safety lockers” to purportedly safeguard their funds. Once at the Bitcoin ATM, scammers send victims a QR code to scan at the machine, effectively transferring all the victim’s cash into the scammer’s crypto wallet.
Victims of Bitcoin ATM scams this year have reported a median loss of $10,000. The FBI issued a warning about this fraudulent scheme in 2021, prompting states like Vermont and Minnesota to implement laws imposing daily transaction limits on crypto kiosks. As with any scam, it is crucial to verify the legitimacy of communications received from alleged companies or financial institutions and never withdraw money based on instructions from unfamiliar sources.
Beyond Bitcoin ATM scams, other crypto-related frauds are on the rise. Instances include deepfake crypto scams emerging on platforms like YouTube, individuals impersonating journalists to drain victims’ digital wallets, and “pig butchering” scams resulting in the arrest of a former bank CEO who embezzled millions for investment in a fraudulent crypto scheme.
