The rise of cryptocurrency ATMs and kiosks is proving to be a double-edged sword, providing a convenient way to convert cash to digital currency but also a growing loophole for criminals. Many of these machines are unregistered and unregulated, allowing criminals to exploit them to steal from unsuspecting victims.
This was the case for 84-year-old artist Joe Samuels, who believed he was communicating with his computer company’s IT department. Unbeknownst to him, the person he granted access to remotely fix his computer was a scammer who deposited $20,000 in his checking account and demanded that he send it back through a Bitcoin ATM.
Fearing for his safety, Samuels complied and deposited the money in cash into a Bitcoin of America kiosk. However, he later found out that the scammers had moved his own money from his savings account into his checking account. The kiosk that Samuels used was seized, and the scammers were accused of stealing millions from victims using Bitcoin of America’s unlicensed and unregulated kiosks.
According to Connecticut State Police Detective Matthew Hogan, who specializes in financial crimes and cryptocurrency, some of these machines are safe for consumers. Still, he warns that due to the lack of regulation around them, many are used for scams or crimes like money laundering. Hogan also believes that they are strategically placed in high-crime areas.
Cybersecurity expert Bree Fowler from CNET echoes Hogan’s concerns, stating that crypto ATMs pose a unique risk due to their lack of regulation and licensing.
Bitcoin of America, which is accused of aiding scammers who stole millions from victims using its kiosks, is facing charges of conspiracy and money laundering along with its CEO and two others.
For Samuels, the fallout from his experience has been devastating. He spent a week in the hospital, and two years later, he has not been able to recuperate the lost funds. His family is considering legal action against Bitcoin of America to recover the money.