Bitcoin ATMs have been appearing in convenience stores and other high-traffic areas over the past few years. They offer a convenient way for some to access cryptocurrency, but they have also become a prime target for scammers.

According to FTC Consumer Sentinel Network data, fraud losses at Bitcoin ATMs have skyrocketed, increasing nearly tenfold from 2020 to 2023, surpassing $65 million in just the first half of 2024. Since most frauds go unreported, this could only be a fraction of the total damage done by fraudsters.

Cryptocurrency has surged as a payment method for scams in recent years, particularly with the growth of fake investment opportunities. Crypto is now a top payment method for many other scams as well. The widespread availability of Bitcoin ATMs has accelerated the trend. Older adults may be particularly vulnerable to these scams.

How Bitcoin ATM Scams Work

Bitcoin scams may vary, but they often start with a call or message about supposed suspicious activity or unauthorized charges on an account. Other times, they might involve a fake security warning on a computer, impersonating companies like Microsoft or Apple. These messages are designed to be alarming and difficult to ignore.

The scammer's story escalates, claiming that your money or bank account is at risk or that your information has been linked to smuggling or money laundering. To increase pressure, the scammers may get a fake government agent to talk to you, claiming to be from the "FTC."

Scammers then direct victims to deposit cash into Bitcoin ATMs, claiming the move will protect their money or resolve the fake legal problem. They might refer to Bitcoin ATMs as "safety lockers." Scammers then instruct victims to withdraw cash from their bank and deposit it into a specific Bitcoin ATM location. The scammer then sends a QR code to scan at the machine, and once scanned, the cash disappears into the scammer's wallet.

How to Avoid Bitcoin ATM Scams

Never click on links or respond directly to unexpected calls, messages or computer pop-ups. If you think the call or message could be legitimate, contact the company or agency yourself using a number or website you look up independently.

Slow down. Scammers want to rush you to keep you from thinking through what's happening. Take your time to check things out. Talk with someone you trust before taking any action. Never withdraw cash in response to an unexpected call or message. Only scammers will tell you to do that.

Don't believe anyone saying you need to use a Bitcoin ATM, buy gift cards, move money to protect it or fix a problem. Real businesses and government agencies will never ask you to do this. For more resources on scams and ways to be alert and protect yourself, visit the Cadence Bank Fraud and Security Center.

Sources:
https://www.ftc.gov/news-events/news/press-releases/2024/09/new-ftc-data-shows-massive-increase-losses-bitcoin-atm-scams
https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2024/09/bitcoin-atms-payment-portal-scammers
https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2022/06/reports-show-scammers-cashing-crypto-craze
https://consumer.ftc.gov/consumer-alerts/2024/03/did-someone-send-you-bitcoin-atm-its-scam
https://consumer.ftc.gov/consumer-alerts/2024/09/scammers-use-bitcoin-atms-steal-your-money

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