Bitcoin ATMs, once a promising bridge to the crypto world, are now being exploited by scammers, causing a staggering rise in financial losses. According to a recent report from the Federal Trade Commission (FTC), Bitcoin ATM scams have surged dramatically, with losses increasing nearly tenfold from 2020 to 2023. The first half of 2024 alone has seen a shocking $65 million lost to these scams.
How Bitcoin ATM Scams Work
Bitcoin ATMs, typically found at gas stations and grocery stores, are meant to facilitate the purchase or sale of cryptocurrency. However, scammers have turned these machines into tools for their deceptive schemes. Here’s how the scam unfolds:
- Contact and Deception: Scammers reach out to their victims via phone calls, text messages, or online pop-ups. They impersonate bank or government officials, creating a sense of urgency and fear. Victims are convinced that their bank accounts are at risk and need immediate protection.
- Fake Instructions: The scammers instruct their victims to withdraw large sums of cash and deposit it into a Bitcoin ATM. They refer to this process as securing funds in “safety lockers” to add a layer of false security.
- QR Code Trick: Once at the Bitcoin ATM, victims are asked to scan a QR code sent by the scammers. This code directs the funds to the scammers’ crypto wallet, leaving victims empty-handed.
The Financial Impact
Victims of Bitcoin ATM scams have reported a median loss of $10,000 each. This alarming trend has caught the attention of law enforcement, with Vermont and Minnesota recently imposing transaction limits on crypto kiosks to combat these scams.
Rising Threats and Prevention
The rise in Bitcoin ATM scams is part of a broader increase in cryptocurrency-related fraud. Scammers are also using deepfake technology on platforms like YouTube and impersonating journalists to access victims’ digital wallets. The FTC and other regulatory bodies are urging crypto users to remain vigilant. Always verify the legitimacy of communications from banks or financial institutions, and never follow financial instructions from unsolicited sources.
Crypto traders and investors must be cautious and aware of these evolving scams to protect their assets. With the rapid growth of the cryptocurrency market, staying informed about these threats is crucial.
