A report from the Federal Trade Commission (FTC) indicates a 1,000 % increase in money lost to scammers through cryptocurrency ATMs in the last three years.    Cryptocurrency ATMs look just like traditional ATMs, but instead of distributing cash, they take cash in exchange for cryptocurrency and enable the transfer of the deposited cash turned into cyptocurrency into crypto wallets.  Due to the anonymity and immediacy of the cryptocurrency transfers done through a cryptocurrency ATM, it is a favorite method of payment for scammers.

Most of the scams using cryptocurrency ATMs involve imposter scams where the scammer poses as either a law enforcement officer, government official or someone providing tech support for a non-existent problem.  What many of these imposter scams have in common is that they scare the targeted victim with a story about an emergency that requires them to take cash from their bank account and use a QR code provided by the scammer to deposit the money into the account of the scammer at a cryptocurrency ATM under the guise of protecting the funds.  In other versions of the scams, victims are told they must make a payment through a cryptocurrency ATM to avoid prosecution for missing jury duty or some othe pretense.

In the Scam of the day for March 4, 2025 I told you about a bill presently before Congress entitled the Crypto ATM Fraud Prevention Act would prevent new users of the cryptocurrency ATMs from spending more than $2,000 in a single day or $10,000 over a two week period to purchase cryptocurrency at cryptocurrency ATMs.  The proposed law would also require cryptocurrency ATM companies to speak directly with new customers attempting to perform transactions of more than $500 and require full refunds when those customers file police reports and alert companies operating cryptocurrency ATMs within 30 days of their transactions.  This bill is, however, far from passage.

Meanwhile, beginning today, Louisiana has a new law that regulates cryptocurrency ATMs in that state limiting the daily transaction abmount to $3,000 and requiring a 72 hour hold on all transfers with the ability to cancel transactions.  This is particularly helpful for people acting quickly and emotionally to the threat posed by a scammer and then realizing they had been scammed.  The Louisiana law also requies the posting at all ATMs of a warning that no government official will ever request a payment through a cryptocurrency ATM.

TIPS

Protecting yourself from these imposter scams that form the basis of cryptocurrency ATM scams starts with recognizing that you can never be sure who is actually contacting you when you are contacted by phone, email or text message so you should never click on a link, download an attachment or provide personal information in response to any of those communications unless you have absolutely confirmed that the communication was legitimate.  Further there is no circumstance where you will be asked by anyone legitimate to withdraw funds from your bank, deposit them into a cryptocurrency ATM and transfer the funds to them.  Only scammers make those requests.

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