The U.S. Federal Trade Commission (FTC) has reported a massive increase in losses to Bitcoin ATM scams, nearly ten times the amount from 2020 and reaching over $110 million in 2023.
Bitcoin ATMs are typically located in convenience stores, gas stations, and other busy areas, but instead of dispensing cash like the traditional ATMs they resemble, they allow you to buy and sell cryptocurrency.
For years, scammers have used them to trick victims into depositing cash while impersonating law enforcement or government officials. In these schemes, the criminals warn the targets that their accounts have been breached and convince them to deposit money to “protect” their savings.
According to today’s FTC report, Americans have already lost $65 million in the first half of 2024 in scams involving Bitcoin ATMs.
The FTC warned that consumers aged 60 and older were more than three times as likely as younger adults to report losses during this period. The median loss reported across all age groups in the year’s first half was $10,000.
Most Bitcoin ATM scam losses result from government impersonation, business impersonation, and tech support scams. The criminals behind them create urgent scenarios to persuade their victims to withdraw cash from their bank accounts and deposit it into a Bitcoin ATM.
However, once consumers scan the QR codes provided by the scammers, their cash is transferred directly into the scammers’ cryptocurrency wallets.
”Scams that use BTMs work in lots of different ways. Many start with a call or message about supposed suspicious activity or unauthorized charges on an account,” the FTC warned.
“Others get your attention with a fake security warning on your computer, often impersonating a company like Microsoft or Apple. These things are hard to ignore, and that’s the point. 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 FTC also provided some tips to help consumers avoid these scams, like not clicking on links or responding directly to unexpected calls, messages, or computer pop-ups before verifying their legitimacy by contacting the company or agency that reached out by using a number or website you find yourself.
When you get rushed into making a decision regarding your money, take your time because scammers often try to rush you. First, check all the information they provide and consult someone you trust before taking action.
Additionally, never withdraw cash in response to unexpected calls or messages, and never believe anyone who says you need to use a Bitcoin ATM, buy gift cards, or move money to protect your bank account or fix a problem. Government agencies and legitimate businesses will never make such requests.
The FBI also warned almost four years ago, in November 2021, that criminals are increasingly asking potential targets to send money using cryptocurrency ATMs (or Bitcoin ATMs) and Quick Response (QR) codes, making it much harder to recover their losses.