Beware of Bitcoin ATMs

From the President's Desk...

Automated teller machines (ATMs) are nothing new; in fact, the first one in the US was installed way back in 1969! Today there are roughly 500,000 such machines throughout our nation. But did you know that similar machines for buying or selling cryptocurrencies now exist? They do, and sadly, many of them are set up to steal from you.

There are approximately 30,000 cryptocurrency ATMs located in the US. Many of them are referred to as Bitcoin ATMs, as Bitcoin is perhaps the most well-known form of crypto. You'll find them in some traditional ATM locations, such as convenience stores and gas stations. Unfortunately, reported fraud losses from crypto ATMs are skyrocketing, increasing by ten times from 2020-2023, exceeding $65 million in the first half of 2024 - and those are only the reported losses, meaning the actual number is likely much higher. Even worse, the size of these individual losses is extremely high, up to a median of $10,000 each during the first half of this year.

Sadly, seniors are most vulnerable to losing money in this way. People ages 60 and over were more than three times as likely as younger adults to report a loss using a Bitcoin ATM, with $2 of every $3 in losses coming from older adults.

So, how do these scams work? Typically, in similar ways to many other scams. The fraudster uses scare tactics, the element of surprise, and threats to generate fear and quick reactions without proper thought and evaluation. These include phone calls, texts, or social media messages about supposed suspicious activity or unauthorized charges to an account. The threats indicate your money is at risk, or your personal information has been linked to drug smugglers or money laundering, and the only way to fix the problem is by depositing money into a Bitcoin ATM, which they even will refer to as a "safety locker". Of course, once the cash is put into this machine of their choosing, it's in the hands of the fraud artist, and it's gone for good.

As with most scams, the best protection is knowledge before the scammer contacts you. Don't overreact or panic, take time to stop and think about what you are being told, and use common sense. Putting large amounts of cash into a machine you've never used in your life isn't going to solve a "problem" like this that comes out of the blue. Legitimate companies or agencies simply don't act in this manner. So again, slow down, think, take a deep breath, and don't fall for the scam!