In a significant global development, more than 600 Bitcoin ATMs went offline in just two months, reflecting a broader crackdown on these machines due to their involvement in scams and illegal activities. The United States saw the highest number of shutdowns, with 411 machines going offline in July and 258 in August. This move is part of a concerted effort by law enforcement to curb fraudulent activities associated with Bitcoin ATMs.
The increase in Bitcoin ATM shutdowns comes amid rising concerns about their use in scams. Data from the Federal Trade Commission (FTC) shows that Bitcoin ATM scams have surged dramatically, with losses exceeding $110 million in 2023 alone. The elderly are particularly vulnerable, with those aged 60 and over being disproportionately targeted. Fraudsters exploit the anonymity and rapid transaction nature of cryptocurrency to deceive victims into transferring their funds under false pretenses.
The crackdown extends beyond the U.S. and is also affecting other countries. Germany, for instance, has seized 13 crypto ATMs from 35 locations due to fears they could become hubs for criminal activity if operators fail to implement adequate Know Your Customer (KYC) controls. Singapore has also banned crypto ATMs as part of its broader strategy to regulate cryptocurrency advertising.
As of early September, there are approximately 39,000 crypto ATMs worldwide, with the U.S. and Canada hosting about 91% of them. Bitcoin Depot, a major operator, is responding to the crackdown by posting scam warnings and implementing screen prompts to alert customers about potential scams.
This wave of regulatory actions highlights a growing concern over the integrity and safety of cryptocurrency transactions, and it’s a critical reminder for traders to stay vigilant and informed about the risks associated with crypto ATMs.
