- Bitcoin ATM scams have been up tenfold since 2020, with losses surpassing $110M in 2023.
- Older adults, especially those over 60, are three times more likely to fall victim.
- Scammers use fake alerts to trick victims into depositing cash into Bitcoin ATMs.
The U.S. has witnessed an alarming increase in Bitcoin ATM scams, with a nearly tenfold rise in reported losses since 2020, exceeding $110 million in 2023. Federal Trade Commission (FTC) data reveal that older adults, particularly those over 60, are disproportionately targeted, being three times more likely than younger adults to fall victim to these scams.
How Do Bitcoin ATM Scams Work?
These scams often involve fraudsters posing as customer service representatives, government officials, or tech support agents. They convince victims to transfer funds through Bitcoin ATMs under false pretenses.
In many cases, victims are coerced into scanning a QR code connected to a digital wallet and depositing cash into a Bitcoin ATM, unknowingly converting it into cryptocurrency that is immediately transferred to the scammer. This type of fraud is facilitated by the rapid proliferation of Bitcoin ATMs across the U.S., which now number around 32,000, up from just 4,000 in 2020.
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Scammers exploit the anonymity and speed of cryptocurrency transactions to their advantage. They often initiate contact with victims by flagging a supposed account breach or identity theft, leading them to believe they need to act quickly to protect their assets. For instance, Indiana resident Marilyn LoCascio, 76, lost $31,500 after being misled by a group of fraudsters posing as an Apple tech support specialist, a bank representative, and U.S. Treasury officials.
Victims Fall Prey Despite Suspicions
Despite her suspicions, LoCascio was ultimately persuaded to follow their instructions, unaware that she was being duped into converting her cash into Bitcoin and transferring it to the scammers. The FTC has warned that such scams are becoming more prevalent as Bitcoin’s value rises, with cryptocurrency-related frauds increasingly affecting older individuals.
Can Bitcoin ATM Operators Stop the Scams?
Bitcoin ATM operators, like Bitcoin Depot, have implemented various measures to combat fraud, including posting scam warnings on their machines and providing extensive customer support. However, they acknowledge that preventing all instances of fraud is challenging. Scott Buchanan, COO of Bitcoin Depot, remarked by commenting,
Unfortunately, like all financial institutions, we cannot prevent every instance of fraud that occurs using our services.
In response to the rising scams, California has introduced new regulations to enhance the oversight of Bitcoin ATM operations. As previously reported, California’s AB39 bill, set to take effect in July 2025, will impose stringent requirements on Bitcoin ATM operators, including daily deposit limits, mandatory disclosure of assets, and regular audits.
