Americans are losing an increasing amount of money to scams involving bitcoin ATMs, according to a newly published report from the Federal Trade Commission (FTC).
Since 2020, the amount of money consumers reported losing to scams involving such machines increased nearly tenfold to more than $110 million in 2023, the FTC said in a Sept. 3 statement.
The federal agency said fraud losses to bitcoin ATMs have already topped $65 million in the first six months of 2024 alone, with consumers reporting a median loss of $10,000.
Those figures could likely be higher, given that the vast majority of frauds are not reported, the agency said.
The machines, which look like traditional ATMs, are typically found at convenience stores and gas stations, among other busy areas. Instead of distributing cash, they allow consumers to exchange cash, or make credit or debit card payments, in return for cryptocurrency.
According to the FTC, the overwhelming number of losses reported due to bitcoin ATMs involve government impersonation, business impersonation, and tech support scams.
Consumers are typically urged by scammers to deposit cash into the machines to protect their savings, the agency said.
Many of the scams begin with fake calls or messages about alleged suspicious activity or unauthorized charges on an account, according to the FTC.
FTC Warns Americans to Remain Vigilant
From there, consumers are duped into believing their money is at risk because their personal information has been linked to criminal activities including money laundering or even drug smuggling. They are usually told by the scammers to deposit cash into a bitcoin ATM to fix the issue.“The lies told by scammers vary, but they all create some urgent justification for consumers to take cash out of their bank accounts and put it into a Bitcoin ATM,” the agency said. “As soon as consumers scan a QR code provided by scammers at the machine, their cash is deposited straight into the scammers’ crypto account.”
The FTC said older people are particularly vulnerable to scams involving bitcoin ATMs, with data showing that people aged 60 and over were more than three times as likely as younger adults to report a loss using such machines in the first six months of this year.
More than two of every three dollars reported lost to fraud using these machines was lost by an older adult, the agency said.
The FTC urged Americans not to respond to unexpected calls, messages, links, or computer pop-ups.
The agency also advised consumers to never withdraw cash in response to an unexpected call or message and not to trust anyone who claims they must use a bitcoin ATM, buy gift cards, or transfer money to protect their accounts or fix an alleged problem.
“Real businesses and government agencies will never do that—and anyone who asks is a scammer,” the FTC said.
Blockchain analytics firm TRM Labs reported that crypto ATMs have processed at least $160 million in illicit transactions since 2019. It noted that regulators are becoming increasingly concerned about their use for scams and other illicit activity.
“As with any virtual asset service provider, proper compliance infrastructure is critical in addressing the risks,” the report said.
