People are losing more money to Bitcoin ATM scams. The U.S. Federal Trade Commission said in a report released on Tuesday that it found losses from Bitcoin ATM scams increased nearly 10-fold from 2020 to 2023, from $12 million to as high as $114 million. In the first half of 2024 alone, consumers lost $65 million to this scheme.
Bitcoin ATMs are physical machines you can use to buy or sell cryptocurrency in places like gas stations and grocery stores. To carry out their scheme, scammers contact victims via phone calls, text messages or online pop-ups. They will then impersonate a bank or government official in an attempt to convince the victim that their bank account has been compromised and that they need to take action.
The scammer then instructs the victim to withdraw large sums of cash and deposit it into a Bitcoin ATM (which the FTC says the scammer may call a “security locker”) to keep their funds safe. Once at the Bitcoin ATM, the scammer sends the victim a QR code to scan at the machine, which places all of the victim’s cash into the scammer’s crypto wallet.
This year, victims reported a median loss of $10,000 to Bitcoin ATM scams. The FBI warned of the scheme in 2021, and since then, Vermont and Minnesota have enacted laws setting daily transaction limits on cryptocurrency kiosks. As is the case with other scams, it is always important to verify that an email or phone call you receive from a purported company or financial institution is legitimate, and you should never withdraw funds based on instructions from a random interaction.
