Source: FTC
Bitcoin ATMs are playing a bigger role in cryptocurrency scams than ever before. Federal Trade Commission officials say consumers reported over $110 million in losses to scams involving Bitcoin ATM machines in 2023, a 1000% increase since 2020.
What are Bitcoin ATMs?
Bitcoin ATMs (also known as BTMs) are electronic ATM-like kiosks designed to facilitate the purchase of cryptocurrencies. These machines look like traditional ATMs and are often located in gas stations, convenience stores, and other high-traffic areas.
How do they work?
BTMs prompt you to deposit money and provide the address of your electronic wallet or prompt you to create one on the spot. When someone puts money into a BTM, it converts the money to cryptocurrency and deposits it into the wallet, typically charging a substantial user fee.
There are multiple scams using BTMs. Many start with a call or message about supposed suspicious activity or unauthorized charges on an account. Others get your attention with a fake security warning on your computer, often impersonating a company like Microsoft or Apple. From there, the story quickly escalates. They might say all your money is at risk or your information has been linked to money laundering or even drug smuggling. The scammer may even impersonate a government agent to up the ante.
So where do BTMs fit into the story?
Scammers claim that depositing cash into these machines will protect your money or fix the fake problem they’ve concocted. They direct you to go to your bank to take out cash, then send you to a nearby BTM location – often a specific one – to deposit the cash you just withdrew. They text you a QR code to scan at the machine, and once you do, the cash you deposit goes into the scammer’s wallet.
So how can you spot and steer clear of these scams?
- Never click on links or respond directly to unexpected calls, messages, or computer pop-ups. If you think it could be legit, contact the company or agency, but look up their number or website yourself. Don’t use the one the caller or message gave you.
- Slow down. Scammers want to rush you, so stop and check it out. Before you do anything else, talk with someone you trust.
- Never withdraw cash in response to an unexpected call or message. Only scammers will tell you to do that.
- Don’t believe anyone who says you need to use a Bitcoin ATM, buy gift cards, or move money to protect it or fix a problem. Real businesses and government agencies will never do that – and anyone who asks is a scammer.
If you believe that you have been defrauded using a Bitcoin ATM, report it to the Investor Protection Unit of the Delaware Department of Justice at 302-577-8424 or Investor.Protection@delaware.gov.
