According to a recent report from the Federal Trade Commission (FTC), consumers have lost over $110 million to scams involving Bitcoin ATM machines in 2023, a tenfold increase from 2020. Within the first six months of the year, fraud losses to Bitcoin ATMs exceeded $65 million. The median loss in the first half of the year was $10,000, with individuals over the age of 60 being three times as likely to fall victim to these scams.
Scammers are using Bitcoin ATMs, which resemble traditional ATMs and are commonly found in high-traffic areas like convenience stores and gas stations, to deceive consumers. These machines accept cash in exchange for cryptocurrency, with scammers urging individuals to deposit cash into them under the guise of "protecting" their savings.
Experts warn that those most at risk of falling victim to these scams are individuals who are easily swayed by fear of loss or hope of gain. Scammers typically prey on individuals by convincing them that they are at risk of losing something and must act immediately, or that they have an opportunity to gain something and must also act quickly.
Sheldon Weisfeld, a partner at Event Horizon Capital and former CEO of CoinVault ATM, noted that Bitcoin ATMs are an attractive tool for scammers due to their accessibility and lack of personal interaction required. With 31,000 Bitcoin ATMs across the country, it is important for individuals to remain vigilant, especially in public places where these machines are located.
Despite the prevalence of scams involving Bitcoin ATMs, there are measures in place to help protect consumers. ATMs often display notices warning users of potential scams and encourage individuals to exercise caution before making transactions. Additionally, ATM operators are required to file Suspicious Activity Reports if users appear to be in distress or at risk of being scammed.
In light of these scams, the FTC advises individuals to slow down, verify information with trusted sources, and refrain from withdrawing cash in response to unexpected calls or messages. It is important to remain cautious and skeptical of anyone who asks you to use a Bitcoin ATM, purchase gift cards, or transfer money to protect or fix a problem, as legitimate businesses and government officials will never ask you to do so.