Bitcoin ATM Scams Soar 10x, $110M Lost in Two Years

The U.S. Federal Trade Commission (FTC) unveiled a frightening increase in scams relating to the use of Bitcoin ATMs. The reported losses increased tenfold between 2020 and 2023. In 2023 alone, Americans reported losing over $110 million to these schemes, a significant leap from previous years.

The Commission’s statistics show that the most likely victim of the crime is a person aged 60 years or above. They are more than three times as likely as young individuals to be deceived by such scams. Emma Fletcher, a senior data researcher at the FTC, pointed out that the machines were deceivers and that their usefulness to crypto criminals was growing.

These machines, which look like conventional ATMs and perform cryptocurrency transactions, have experienced an explosive increase in the U.S. over the past few years. Since the beginning of 2020, these people’s numbers have increased from almost 4,000 to 32,000, so they can be seen in different public places such as convenience stores and gas stations. It has been this way, not directly, that has led to increased fraud.

Usually, the scam starts when the fraudster gets in touch with the victim, pretending to be a customer service agent who is supposedly fixing security breaches. The victims receive a QR code, which, when scanned at a Bitcoin ATM, directs them to deposit cash into a digital wallet that the scammer controls. This way, the scammer first converts the cash into Bitcoin, which is transferred immediately, making the victim think that their assets are properly secured.

The various techniques used by these conmen are getting more and more elaborate. They might, for example, borrow the identities of staff at prominent tech firms like Apple or Microsoft or even pretend to be government officials to manipulate the victims. The rise of the dark web, where personal information is often bought and sold, has further facilitated these fraudulent schemes.

Bitcoin’s Value Boosts Crypto Scam Appeal

The value of Bitcoin has doubled in a year to around $60,000, which led to an increase in crypto-related fraud. According to the FTC, two-thirds of the losses from Bitcoin ATM scams are suffered by individuals who are already nearing or in retirement.

Operators of Bitcoin ATMs, such as Bitcoin Depot, claim to have adopted measures to prevent fraud and provide customer support. However, as scams become more sophisticated, the best defense is to watch out for them. Fletcher advises individuals to pause and verify any suspicious requests before proceeding with transactions through Bitcoin ATMs.

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