In recent years, Bitcoin (BTC) ATM-related scams have increased dramatically, with a 1,000% increase since 2020. This phenomenon worries both authorities and industry companies, as criminals exploit the anonymity and speed of cryptocurrency transactions to scam victims. Older people turn out to be the main targets of these scams, with three times the risk compared to other age groups.
According to data from the U.S. Federal Trade Commission (FTC), economic losses from these scams exceeded $110 million in 2023. The commission stresses the importance of taking preventive measures to protect consumers.
Mechanisms of Bitcoin ATM Scams
Bitcoin ATM scams often involve tricking victims into transferring funds under false pretenses. Here are some of the most common methods used by scammers:
- Invitations to pay nonexistent taxes or fines using Bitcoin.
- Requests for payment to redeem bogus prizes or winnings.
- False representations of government authorities or known companies.
- Requests for urgent payments to “save” children or grandchildren from serious emergencies that are completely made up.
Crypto ATMs operate similarly to traditional ATMs but allow people to buy Bitcoin. They are banned in nations such as the United Kingdom and Singapore, while they are permitted in the United States, where their number has increased considerably. These devices are also permitted in Italy and are located in busy areas.
Often, scammers contact victims posing as customer service personnel, constituted authorities, or lawyers to warn of false emergencies, identity theft attempts, or unauthorized account access. They forward a QR code tied to a digital wallet and ask the victim to insert money into the Bitcoin ATM, which converts it to Bitcoin and transfers it to the scammers. Cryptocurrency-related scams have grown in tandem with the rise in Bitcoin’s value, and once made, they are not as traceable as payments made with traditional ATMs.
Important to remember: no legitimate organization will ever ask for cryptocurrency payments through a Bitcoin ATM. The FTC warns that no cryptocurrency offers protection or guarantees for funds, despite misleading claims by fraudsters.
Consumer Protection Measures
To address this growing threat, several strategies are recommended to protect consumers:
- Never send cryptocurrency to digital wallets whose provenance is unknown.
- Be skeptical of urgent, unverified payment requests.
- Always verify the authenticity of communications received, especially if they request the use of Bitcoin.
In addition, companies such as Bitcoin Depot have implemented alerts on their terminals to inform customers of potential risks. These include on-screen messages warning about common scams.
Bitcoin ATM scams are a growing threat in the cryptocurrency market. With increased regulations and efforts by companies in the industry, it is hoped that the impact of these fraudulent activities will be reduced and a safer environment for all cryptocurrency users will be ensured.
