FTC Warns of Spike in Bitcoin ATM Fraud

The Federal Trade Commission (FTC) has reported a sharp rise in scams involving bitcoin ATMs, with fraud losses increasing nearly tenfold from 2020 to 2023 and exceeding $65 million in the first half of 2024.

The Federal Trade Commission (FTC) reported a sharp increase in scams involving bitcoin ATMs, with fraud losses rising nearly tenfold from 2020 to 2023 and exceeding $65 million in the first half of 2024. These scams often target vulnerable populations, such as older adults, and have a significant financial impact.

The FTC highlighted the surge in fraud associated with bitcoin ATMs (BTMs) in a consumer protection data spotlight published on Tuesday. The FTC is an independent agency of the U.S. government responsible for enforcing civil antitrust law and promoting consumer protection.

According to the FTC, these machines, which are typically found in high-traffic areas like convenience stores and gas stations, have become an increasingly popular target for scammers.

“These machines, which are often placed in high-traffic areas like convenience stores and gas stations, have become an increasingly popular target for scams, the FTC said, adding:

“FTC Consumer Sentinel Network data show that fraud losses at BTMs are skyrocketing, increasing nearly tenfold from 2020 to 2023, and topping $65 million in just the first half of 2024.”

“Since the vast majority of frauds are not reported, this likely reflects only a fraction of the actual harm,” the FTC noted.

The regulator went on to explain that scams involving cryptocurrency ATMs often include impersonations of government officials, businesses, or tech support, with scammers convincing victims to deposit cash into these machines under false pretenses.

“Scammers often impersonate government officials, businesses, or tech support to convince people to quickly withdraw cash and deposit it into a bitcoin ATM,” the FTC described.

The FTC also reported a significant financial impact from these scams, particularly among older adults.

“When people used BTMs, their reported losses are exceptionally high,” the regulator stated, adding:

“In the first six months of 2024, the median loss people reported was $10,000.”

The FTC explained that the growing availability of cryptocurrency ATMs has made them a tool for scams, with criminals often preying on victims’ fears of security breaches or financial crimes.

“Criminals are using bitcoin ATMs to scam people out of large sums of money, often preying on people’s fears of security breaches or financial crimes,” the regulator said.

To avoid falling victim, the regulator advises consumers to be cautious of unsolicited communications and never withdraw cash or use a bitcoin ATM as directed by unknown individuals.

“Be wary of any communication that you did not initiate, and never withdraw cash or use a bitcoin ATM at the direction of someone you don’t know,” the FTC concluded.