Bitcoin ATM Scams on the Rise

The FTC reports that losses from Bitcoin ATM fraud exceeded $110 million in 2023, a staggering increase of nearly tenfold since 2020. The victims of these scams are predominantly older adults, with those over 60 years old being three times more likely to fall prey to such schemes compared to younger individuals.

How the Scams Work

Fraudsters are exploiting Bitcoin ATMs, which resemble traditional ATMs but handle cryptocurrencies. The machines are legal in the U.S. and have proliferated across the country, making them easily accessible in places like convenience stores and gas stations. Scammers often contact victims posing as customer service representatives, claiming to flag identity theft or account breaches.

Victims are typically sent a QR code linked to a digital wallet and are instructed to deposit cash into the ATM, which is then converted to Bitcoin and sent directly to the scammer's account.

Vulnerable Demographics

The FTC notes that $2 out of every $3 lost in Bitcoin ATM scams comes from individuals near or over retirement age. Older adults are particularly susceptible due to the urgency created by scammers, who often impersonate representatives from reputable companies like Apple or Microsoft.

For instance, Marilyn LoCascio, a 76-year-old, lost $31,500 after being convinced by scammers posing as tech support and government officials that her account had been hacked.

The Role of Bitcoin ATM Operators

While Bitcoin ATM operators claim to have numerous scam warnings displayed at their machines, the FTC emphasizes that fraud remains rampant. Scott Buchanan, COO of Bitcoin Depot, stated that they provide extensive customer support and regulatory compliance to combat fraudulent activities. However, they acknowledge that they cannot prevent every instance of fraud.

Key Takeaways

• Bitcoin ATM fraud losses reached $110 million in 2023, a significant increase.
• Seniors are disproportionately affected, with those over 60 being three times more likely to be scammed.
• Scammers often impersonate customer service representatives and use urgent messages to create a sense of panic.
• The increase in Bitcoin ATMs across the U.S. has facilitated these scams.

It's crucial for consumers to remain vigilant and think twice before sending money through Bitcoin ATMs, especially under pressure from unknown sources.