A concerning rise in cryptocurrency scams has been observed, particularly those involving Bitcoin ATMs, with older adults increasingly being targeted. According to the Federal Trade Commission (FTC), losses from these scams reached over $110 million in 2023, a figure that has increased nearly tenfold compared to the $12 million reported in 2020. The increasing accessibility of Bitcoin ATMs, often found in locations such as convenience stores and gas stations across the United States, has contributed to this surge in fraud.
How Bitcoin ATM Scams Work
Bitcoin ATMs, which allow users to purchase cryptocurrency quickly, have become a convenient tool for fraudsters, who exploit these machines to carry out their schemes. Scammers typically initiate contact with their victims via phone, email, or text message, claiming there is an urgent issue with the victim’s bank or investment accounts. These fraudsters often impersonate customer service representatives or even government officials, creating a sense of panic and urgency that compels the victim to act without thorough consideration.
Special Agent Derek Hackert from the FBI explained, “The way that it works is that a scammer will contact, either by phone, email, or text message, saying there is some type of emergency with your bank accounts or investment accounts.” Once the victim is sufficiently alarmed, the scammer directs them to withdraw money and deposit it into a Bitcoin ATM under the pretense of transferring the funds into a “government-protected” digital wallet or crypto account. This fabricated solution is presented as the only way to resolve the supposed emergency, and victims are often instructed to keep the situation secret, even from their loved ones.
Targeting the Vulnerable
The victims, many of whom are over 60 years old, are three times more likely to be targeted than younger adults, according to recent investigations. The rapid increase in the value of cryptocurrencies has only exacerbated the problem, as the potential for quick financial gain makes these schemes even more attractive to scammers. Once the money is deposited into the Bitcoin ATM, it is quickly transferred to the scammer’s account, and the victim is left with no recourse. The irreversible nature of cryptocurrency transactions adds another layer of complexity, making it nearly impossible to recover the stolen funds once the transfer is completed.
Special Agent Hackert emphasized, “No ATM, no Bitcoin, or any cryptocurrency will ever protect your money. There is no such thing as a ‘government’ Bitcoin (crypto) account or digital wallet.”
Efforts to Combat Scams
Despite the efforts of law enforcement and cryptocurrency ATM companies, such as Bitcoin Depot, to combat these scams, the problem persists. Companies managing Bitcoin ATMs have implemented measures like scam alerts and live-chat support to assist potential victims, but these efforts have not been entirely successful in curbing the rise in fraud. Scott Buchanan, Chief Operating Officer of Bitcoin Depot, acknowledged the challenge, stating, “This is a problem that cannot be fought altogether.”
FTC Guidelines and Public Awareness
The FTC has issued guidelines for individuals to protect themselves from these scams, urging them to take a moment and carefully verify any requests to transfer money via Bitcoin. The FTC advises, “There should be an emphasis on slowing down and checking out the legitimacy of such requests, as these scams are becoming increasingly prevalent.” One of the most effective ways to avoid falling victim to these scams is to never transfer money to “protect it” and to remain skeptical of any request that involves a Bitcoin ATM.
The FTC warned, “Never move or transfer your money to ‘protect it.’ There is never a legitimate reason for someone to send you to a Bitcoin ATM.” Additionally, the public is urged to report any suspicious activity or potential scams to the FBI’s Internet Crime Complaint Center (IC3) at www.ic3.gov. The IC3 provides a platform for individuals to report internet-based crimes, including cryptocurrency scams, which can assist law enforcement in tracking and investigating these schemes.
The Broader Issue of Cybersecurity
The rise in Bitcoin ATM scams has drawn attention to the broader issue of cybersecurity and the need for increased public awareness, especially among older adults who may be less familiar with digital technologies. Iowa Attorney General Brenna Bird has also issued a warning about the rise in cryptocurrency scams, highlighting the tactics scammers use to exploit victims. Bird explained, “Scammers will sometimes try to befriend someone over platforms like Facebook before coaxing them into sending the scammer money.”
The Attorney General’s office emphasized that if someone directs you to a cryptocurrency ATM, it is likely a scam. Bird stated, “Remember to never send money to someone you met online and if someone sends you to a Cryptocurrency ATM, it is a scam.” The office also stressed the importance of never providing personal information of any kind to someone you meet online, as this can be used to further exploit the victim.
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A Victim’s Story: Cindy’s Experience
Cindy, a resident of central Iowa in her early 60s, shared her experience as a victim of a romance scam that began on Facebook. “It started on Facebook, just someone that slipped in and it was very, very lowkey,” Cindy recalled. Over time, the scammer gained her trust by discussing shared interests like music, plants, and art, creating the illusion of a genuine friendship.
Eventually, the scammer requested money, claiming he needed a certificate to return to the United States, which Cindy, unfortunately, provided by maxing out her credit cards and taking out a high-interest loan. Cindy said, “I went to the Bitcoin machine and put the money in. I know it was $112,000 that I had on a loan or for my credit cards.” The scammer promised to return by holidays like Christmas or Easter, but there was always another fee to pay. “One of the main promises was that he was always going to be here by Christmas or he’s going to be here by Easter,” Cindy explained.
The Aftermath and Lessons Learned
The realization that she had been scammed came when Cindy received a call from the Attorney General’s office, confirming her worst fears. Cindy expressed her relief, saying, “It was such a blessing because I knew for sure… the flags really became glaring at that point.” The incident highlights the vulnerability of older adults to these types of scams and underscores the need for increased education and preventive measures.
To protect oneself from becoming a victim, experts recommend being vigilant, questioning any unusual financial requests, and seeking advice from trusted sources before taking action. The FBI and other law enforcement agencies continue to monitor and investigate these scams, but public awareness remains a critical component in combating this growing problem.
Special Agent Hackert advised, “Hang up the phone. Find the phone number for your bank or investment account on your statement or their official website. Call your bank or investment company and ask if there is really a problem.” The best defense against these scams is to stay informed, remain cautious, and report any suspicious activity to the appropriate authorities.
How Scammers Trick You
- Scammers often connect with you through text, email, social media, dating apps, or phone calls.
- They build a relationship with you to gain your trust.
- Once trust is established, scammers may encourage you to make fake investments, lie about computer viruses, or impersonate government agencies such as the IRS or FBI.
- They use aggressive tactics to pressure and manipulate you into sending money into their accounts through a cryptocurrency ATM.
- Scammers make the cash-to-crypto process easy, often staying on the phone with you until the money has been sent.
How to Protect Yourself from Cryptocurrency ATM Scams
- Remember: If someone sends you to a cryptocurrency ATM, it’s a scam.
- Hang up: Do not respond to any unsolicited call or message.
- Protect Personal Information: Never provide personal information such as your Social Security or bank account number, or grant access to any financial accounts to someone you met online.
- Report Suspicious Activity: Contact your state Attorney General’s Office, local law enforcement, or the Federal Trade Commission (FTC) if you suspect any fraudulent activity.
What to Do If You’ve Been Targeted
- If you or someone you know has been targeted by a cryptocurrency ATM scam, contact your state Attorney General’s office, local law enforcement, or the Federal Trade Commission (FTC) at 1-877-FTC-HELP (1-877-382-4357).
- File a complaint online with the FTC at Report Fraud.
