Bitcoin ATM Scams Increasing in Frequency

A significant rise in financial losses linked to scams involving Bitcoin ATMs has been reported by the Federal Trade Commission (FTC). The losses have surged tenfold since 2020, surpassing $110 million in 2023. Within the initial half of the year, fraud losses from Bitcoin ATMs exceeded $65 million.

Data from the FTC reveals that the median loss in the first six months of the year stood at $10,000. Notably, individuals over 60 years old were three times more likely than younger adults to fall victim to these scams. Scammers are capitalizing on Bitcoin ATMs, which resemble traditional ATMs and are commonly situated in high-traffic locations such as convenience stores and gas stations.

These machines allow cash to be exchanged for cryptocurrency. Scammers are manipulating individuals into depositing cash into these ATMs under the guise of “protecting” their savings, as per the FTC’s findings. Grant Cardone, CEO of Cardone Capital and Cardone Training Technologies, highlighted that those most susceptible to these scams are individuals easily swayed by the fear of loss or the hope of gain.

Sheldon Weisfeld, a partner at Event Horizon Capital and former CEO of CoinVault ATM, noted that scammers find Bitcoin ATMs particularly appealing. CoinVault ATM was the first licensed MSB Bitcoin ATM operator in the U.S., facilitating cash buy and sell transactions for customers interested in Bitcoin.

Weisfeld emphasized that Bitcoin ATMs do not require personal interaction like traditional banking transactions, making them convenient for scammers. With approximately 31,000 Bitcoin ATMs nationwide, these machines are easily accessible. Weisfeld suggested that individuals well-versed in Bitcoin should be vigilant for those less informed, especially in public settings where these ATMs are located.

The evolving nature of scams poses a constant challenge, given the rapid pace of technological advancements, Weisfeld cautioned. Despite efforts to educate the public about potential scams, staying abreast of the changing landscape remains difficult. Weisfeld stressed the ease with which scammers can gather personal information from the internet to enhance the authenticity of their schemes.

To combat potential scams, the FTC offers the following advice:

1. Take your time and consult with a trusted individual before making any decisions.
2. Refrain from withdrawing cash in response to unexpected calls or messages, as scammers often use this tactic.
3. Be cautious of individuals urging you to use Bitcoin ATMs, purchase gift cards, or transfer money to resolve supposed issues, as legitimate entities will not make such requests.