What to Take Away
- Consumer losses from bitcoin ATM scams have increased dramatically, according to the Federal Trade Commission (FTC). Since 2020, reported losses have increased nearly tenfold, reaching $110 million in 2023.
- Over 60-year-olds, in particular, are three times more likely than younger adults to fall for these con artists.
- Swindlers frequently assume the personas of businesses, government officials, or tech support representatives in order to convince victims to use a provided QR code to deposit money into bitcoin ATMs.
- The FTC advises consumers not to use bitcoin ATMs when prompted by unknown parties, despite the fact that bitcoin ATM operators claim to have implemented fraud prevention measures.
According to new data from the Federal Trade Commission (FTC), losses from bitcoin (BTCUSD) ATM scams reached over $110 million in 2023, a nearly tenfold increase in just three years.1 The scams are only getting worse. The Federal Trade Commission (FTC) reported that bitcoin ATM scam losses exceeded $65 million in the first six months of 2024.
It was discovered that older adults, particularly those over 60, are more than three times more likely than younger people to be scammed. During this time, the median loss across all age groups was a whopping $10,000.
How Do Scam Bitcoin ATMs Work?
Scammers find it appealing to use these specialized bitcoin ATMs, which accept cash in exchange for cryptocurrency and are frequently found in high-traffic locations like gas stations and convenience stores.
In order to “protect” their savings, fraudsters frequently assume the identities of businesses, government officials, or tech support representatives. They then create a fictitious need for the victims to withdraw money from their bank accounts and deposit the funds at a bitcoin ATM.
The Federal Trade Commission stated in a press release on Tuesday that “as soon as consumers scan a QR code provided by scammers at the machine, their cash is deposited directly into the scammers’ crypto account.”
Notably, because bitcoin and other cryptocurrencies are irreversible, there is no recourse other than notifying law enforcement once the payment has been sent.
The operators of Bitcoin ATMs can’t stop all fraud.
Even though bitcoin ATM operators claim to have implemented measures to prevent fraud, such as offering live customer support and warnings during transactions, incidents continue.
According to a recent report from NBC News2, Bitcoin Depot (BTM) Chief Operating Officer (COO) Scott Buchanan emphasized his company’s efforts to comply with regulations and protect customers, but he also acknowledged that not all fraud can be avoided. The FTC suggests that the best way for customers to protect themselves is to slow down, verify any communication that appears suspicious, and avoid sending money through a bitcoin ATM at the request of an unknown party.
