In This Post:
- Bitcoin ATM scams rise nearly tenfold since 2020, surpassing $110M in 2023.
- Older adults are 3x more likely to fall victim to these schemes.
- Fraudsters use fake alerts and QR codes to steal funds via Bitcoin ATMs.
- Bitcoin ATM providers claim strong anti-fraud measures, but scams persist.
Bitcoin ATMs, once a novel convenience, have become a gateway for financial fraud, particularly targeting older adults. According to data from the Federal Trade Commission (FTC), losses from Bitcoin ATM scams skyrocketed in 2023, reaching over $110 million—nearly ten times the amount reported in 2020.
This dramatic rise in fraud highlights a growing trend where scammers are exploiting the popularity and accessibility of Bitcoin ATMs to steal large sums of money from unsuspecting victims.
While Bitcoin ATMs are designed to facilitate easy cryptocurrency transactions, fraudsters have found ways to manipulate these machines for their gain. Typically, a scam begins with a seemingly legitimate contact—often a text, email, or phone call—claiming to be from a trusted entity like a bank, government agency, or tech company.
The scammer then convinces the victim that their financial accounts are at risk and urges them to transfer money via a Bitcoin ATM to secure their funds. Once the victim deposits cash into the ATM, it is quickly converted into Bitcoin and transferred to the scammer’s digital wallet, leaving the victim with little recourse to recover their lost money.
Older Adults: Prime Targets for Fraud
Older adults are particularly vulnerable to these scams. The FTC reports that consumers over the age of 60 are more than three times as likely to report falling victim to Bitcoin ATM fraud compared to younger adults. The complexity of cryptocurrency, combined with the urgency created by scammers, makes older individuals more susceptible to these types of scams.
For example, Marilyn LoCascio, a 76-year-old Indiana resident, lost $31,500 after being duped by a group of scammers posing as Apple tech support, bank representatives, and government officials.
They convinced her that her accounts had been hacked and that she needed to transfer money via a Bitcoin ATM to protect her funds. LoCascio, unfamiliar with Bitcoin and under pressure from the scammers, followed their instructions, only to realize too late that she had been defrauded.
Bitcoin ATMs have become a tool for scammers not just because of their widespread availability—there are now nearly 32,000 ATMs across the U.S., up from just over 4,000 in 2020—but also because they allow transactions that are difficult to trace and reverse. This has made them an attractive option for fraudsters, especially as the value of Bitcoin has soared, making the potential gains from such scams even more lucrative.
Industry Response and Ongoing Risks
Bitcoin ATM operators, like Bitcoin Depot, assert that they have implemented numerous safeguards to prevent fraud. These include warnings at various stages of the transaction process and customer support options for users who suspect they may be targets of a scam. However, despite these measures, the prevalence of Bitcoin ATM fraud continues to rise.
Scott Buchanan, COO of Bitcoin Depot, emphasizes that while the company takes extensive steps to prevent fraud, it is challenging to stop all instances of it. Buchanan notes that like all financial institutions, they are limited in their ability to prevent every fraud attempt, especially as scammers become increasingly sophisticated in their tactics.
The FTC advises that the best defense against Bitcoin ATM scams is vigilance. Consumers should be cautious of unsolicited messages or calls that create a sense of urgency and pressure them into making quick decisions involving financial transactions.
Taking the time to verify the legitimacy of such communications and seeking advice before using a Bitcoin ATM can be crucial in avoiding falling victim to these scams.
As the use of Bitcoin ATMs grows, so too does the need for increased awareness and education about the risks associated with these machines. Older adults, in particular, should be informed about the dangers of Bitcoin ATM scams and encouraged to approach any request to use these machines with skepticism.
