Bitcoin ATM Scams Surge with Over $110 Million in Losses in 2023
In a stark warning to the public, the U.S. Federal Trade Commission (FTC) has disclosed staggering figures related to financial scams involving Bitcoin ATMs. In 2023 alone, the total amount of money lost to these scams exceeded $110 million—an almost tenfold increase compared to 2020. The trend has continued to escalate in 2024, with over $65 million lost in just the first six months.
Bitcoin ATMs, once seen as a gateway to the burgeoning world of cryptocurrency, have become a favored tool for criminals. Found in everyday locations like supermarkets, gas stations, and malls, these machines allow users to buy or sell cryptocurrency. But unlike traditional ATMs, which are linked to banking institutions with regulated safeguards, Bitcoin ATMs operate in a more decentralized and less monitored financial ecosystem—making them a ripe target for exploitation.
Fraudsters have refined their tactics, often calling individuals under the pretense of being government officials, corporate representatives, or law enforcement officers. They claim the victim’s bank accounts are in jeopardy and persuade them to “protect” their money by transferring it through a Bitcoin ATM. In reality, the funds are funneled into the criminals’ untraceable cryptocurrency wallets.
The FTC’s data indicates that elderly individuals are the most frequent victims of Bitcoin ATM scams. Citizens over 60 are three times more likely to suffer financial losses from these schemes compared to younger age groups. The average reported loss in 2024 was around $10,000—an amount that can devastate retirees relying on fixed incomes. The emotional and psychological toll can be just as severe, with many victims feeling embarrassed and reluctant to seek help or report the crime.
Most scams follow a similar script. The scammer contacts the target, often via phone, email, or even text, claiming urgent action is needed to resolve a supposed issue. Whether it’s posing as a government agency, tech support, or a corporate fraud department, the message is the same: immediate action is required.
The victim is then directed to a Bitcoin ATM and instructed to scan a QR code that allegedly links to a secure account. Once scanned, the money is instantly transferred to the criminal’s cryptocurrency wallet, and the transaction is nearly impossible to reverse. The decentralized nature of cryptocurrencies makes it extremely difficult to trace funds or recover them once they’ve been transferred, leaving victims with little recourse.
The FTC identified three common scams that use Bitcoin ATMs as the final step in the fraud process:
- Government Impersonation: The scammer claims to be from the IRS, FBI, or another federal agency, saying the victim owes back taxes or is involved in a legal matter that requires immediate payment.
- Corporate Fraud: The criminal poses as a representative of a well-known company—often a tech giant like Microsoft or Apple—claiming that the victim’s account has been compromised and needs verification through a Bitcoin ATM.
- Tech Support Scams: The victim receives a pop-up message or phone call warning of a security breach on their computer. They are then directed to transfer funds through a Bitcoin ATM to safeguard their accounts from hackers.
The FTC urges the public to remain vigilant and take proactive steps to avoid falling victim to Bitcoin ATM scams. Here are several key recommendations:
- Verify Unexpected Requests: If someone contacts you about urgent financial issues or suspicious activity, independently verify their claims. Do not rely on the phone numbers or links provided by the caller or message. Instead, look up the official contact information for the company or government agency and reach out directly.
- Avoid Pressure Tactics: Scammers often create a false sense of urgency, giving victims no time to think. If you’re asked to transfer funds immediately, it’s a red flag. Legitimate organizations will not pressure you into rapid decisions involving large sums of money.
- Be Skeptical of QR Codes: Never scan a QR code sent by an unknown party or in response to a phone call. Scammers use QR codes to direct funds into their own cryptocurrency wallets, and once the transaction is complete, recovering the money is virtually impossible.
As financial scams evolve with technology, it’s important for consumers to stay informed and cautious. The FTC continues to investigate and raise awareness about these schemes, but the best defense remains personal vigilance and education. By recognizing the warning signs and knowing how to respond, individuals can protect themselves from becoming the next victim of a Bitcoin ATM scam.
