Rising Bitcoin ATM Fraud Alert: Understanding the Scam Techniques
Financial scams come in various guises: a well-known technology corporation supposedly alerting you that your online account has been compromised, or an individual posing as a bank executive alleging unauthorized charges on your credit card. More intricate schemes may involve artificial intelligence and fraudulent law enforcement officials offering assistance with your situation — all you have to do is hand over bundles of cash to an unidentified driver outside your residence.
A significant warning sign? The Federal Trade Commission notes that such fraud increasingly revolves around a so-called bitcoin ATM. These kiosks, known as bitcoin teller machines (BTM), are commonly located in places like convenience stores, bars, and gas stations, resembling traditional ATMs. However, instead of facilitating cash withdrawals, users can typically purchase or sell cryptocurrency using cash, debit, or credit cards. Another distinction is that BTMs are associated with a digital wallet rather than a bank account.
In 2023, consumers reported losses totaling $114 million from scams involving BTMs — marking an almost 900% surge over the previous three years, as per a report by the FTC released on Tuesday. Losses up to June of this year amount to approximately $66 million, indicating a growing trend, with the median amount lost being a substantial $10,000.
According to the Better Business Bureau, cryptocurrency-related scams now rank among the most prevalent financial frauds. Older consumers are often targeted by criminals, with the FTC highlighting that individuals aged 60 and above are over three times more susceptible to falling victim to BTM scams compared to younger demographics.
In a typical BTM scam, the perpetrator may assert that your computer has been compromised, or even link your bank accounts to illicit activities like drug trafficking or money laundering. They offer assistance but only if you strictly follow their instructions.
The scam may also involve offering to connect you with a representative from the FTC, IRS, or another government agency. Subsequently, the scammer will direct victims to withdraw cash from their bank and guide them to a nearby BTM, where they provide a QR code to scan at the machine, swiftly transferring the money to the thieves’ crypto wallet.
Ultimately, the FTC advises, “Do not trust anyone claiming you need to utilize a Bitcoin ATM to safeguard your funds or resolve an issue. Legitimate businesses and government agencies would never make such demands — anyone who does is a fraudster.”
