Bitcoin ATMs: A Gateway for Scammers?

The Federal Trade Commission (FTC) released today a report highlighting a rise in fraud at Bitcoin ATMs. While these machines enable users to convert cash into cryptocurrency, they have increasingly become a tool for scammers to commit fraud.

According to the FTC Consumer Sentinel Network, fraud losses at BTMs have skyrocketed in recent years, reaching over $65 million in just the first half of 2024. This represents a significant increase from previous years, indicating that scammers are increasingly turning to BTMs as a means of carrying out their schemes.

Cryptocurrency has emerged as a major payment method for scams, particularly in fake investment opportunities. However, its use has expanded to a variety of other scams, with BTMs facilitating this shift, as noted by the FTC.

The report states that one common scam involves scammers impersonating government agencies or financial institutions and claiming that the victim’s account has been compromised. The scammers then instruct the victim to withdraw cash and deposit it into a BTM, claiming that this will protect their funds.

Another common scam involves scammers sending victims fake security warnings or error messages, often impersonating companies like Microsoft or Apple, notes the FTC.

These messages may claim that the victim’s computer is infected with malware or that their account has been hacked. The scammers then instruct the victim to take action, such as depositing money into a BTM, to resolve the issue.

The FTC report notes that older adults are especially vulnerable, with those aged 60 and over being more than three times as likely as younger individuals to report a loss involving a BTM. In fact, two-thirds of the total reported losses from BTM scams came from this age group.

The FTC advises the public to watch out for common tricks used by scammers. They note that it’s important not to click on links or respond directly to unexpected calls, messages, or computer pop-ups.

Additionally, the FTC warns against withdrawing cash from a bank account in response to an unexpected request, as scammers often use this method to steal money.

Finally, the FTC suggests that any suggestion to use a Bitcoin ATM to protect money or fix a problem should be ignored. Legitimate businesses and government agencies will never make such requests.