Bitcoin ATMs: A payment portal for scammers

Bitcoin ATMs (or BTMs)[1] have been popping up at convenience stores, gas stations and other high traffic areas for years.[2] For some it is a convenient way to buy or send crypto, but for scammers it has become an easy way to steal. FTC Consumer Sentinel Network data shows that fraud losses at BTMs are skyrocketing, increasing nearly tenfold from 2020 to 2023, and surpassing $65 million in the first half of 2024 alone.[3] Since the vast majority of fraud goes unreported, it likely reflects only a fraction of the actual damage.[4]

Cryptocurrency has become a major payment method for scams in recent years, along with the massive growth in crypto payments on fake investment opportunities.[5] But now crypto is also a top payment method for many other scams.[6] Widespread access to BTMs helped make this possible. Reports of losses using BTMs overwhelmingly involve government impersonation, business impersonation, and tech support scams.[7] And when people have used BTMs, their reported losses are unusually high. In the first six months of 2024, the median loss people reported was $10,000.[8]

In the first half of the year, people 60 and older were more than three times as likely as younger adults to report a loss using a BTM.[9] In fact, more than two out of every three dollars reported lost to fraud with these machines were lost by an older adult.[10]

Scams using BTMs work in many different ways. Many begin with a call or message about suspected suspicious activity or unauthorized charges on an account.[11] Others draw your attention with a fake security alert on your computer, often impersonating a company like Microsoft or Apple. These things are hard to ignore, and that’s the point. From there, the story escalates quickly. They may say all your money is at risk, or your information is linked to money laundering or even drug smuggling. The scammer might get a fake government agent on the line—perhaps even claiming to be from the “FTC”—to make the lead.

So where do BTMs fit into the story? Scammers claim that depositing cash into these machines will protect your money or solve the fake problem they’ve invented. They even called BTMs “safety cabinets”. They order you to go to your bank to withdraw cash. Next, they send you to a nearby BTM location – often a specific one – to deposit the cash you just took out of your bank account.[12] They text you a QR code to scan at the machine, and once you do, the cash you deposit goes right into the scammer’s wallet.

So how can you spot these scams and stay away?

Never click on links or respond directly to unexpected calls, messages or computer pop-ups. If you think it might be legitimate, contact the company or agency, but look up their number or website yourself. Do not use the one the caller or message gave you. Slow down. Scammers want to rush you, so stop and check it out. Before you do anything else, talk to someone you trust. Never withdraw cash in response to an unexpected call or message. Only scammers will tell you to do this. Don’t believe anyone who says you need to use a Bitcoin ATM, buy gift cards or move money to protect it or solve a problem. Real businesses and government agencies will never do this – and anyone who asks is a scammer.

To spot and avoid scams, visit ftc.gov/scams. Report fraud to the FTC at ReportFraud.ftc.gov.

[1] While machines that allow consumers to buy cryptocurrencies are commonly referred to as Bitcoin ATMs or BTMs, these machines often handle — and scams can involve — other cryptocurrencies in addition to Bitcoin.

[3] These and other figures throughout this Spotlight are estimates based on keyword analysis of the narratives provided in reports that identified cryptocurrency as the payment method. Not all reports identify a payment method or include sufficient detail in the report narrative to determine whether a BTM was used.

[4] See Anderson, KB Who do victims of mass market consumer fraud complain to? at 1 (May 2021), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3852323 (study showed that only 4.8% of people who experienced mass market consumer fraud at a Better Business Bureau or a government entity).

[6] In the first half of 2024, cryptocurrency was the top payment method in terms of total reported losses on tech support scams and job scams, and the second most expensive method after bank transfers on business impersonation scams, government impersonation scams, romance scams and family and impersonation scams friends

[7] In the first half of 2024, approximately 86% of people who reported a fraud loss using a BTM indicated that it was to a government impersonation, business impersonation, and/or tech support scam. This excludes reports categorized as unspecified.

[8] In the first half of 2024, the median individual reported fraud loss when cryptocurrency was the reported payment method (including reports with and without BTM use) was $5,400; the average individual who reported loss to fraud was usually $447.

[9] This comparison of older and younger consumer reporting rates is normalized based on the population size of each age group using the Census Bureau’s 2018-2022 American Community Survey 5-year estimates. This excludes reports that did not include information on consumer age.

[10] In the first half of 2024, people 60 and older reported losing $46 million with BTMs, or about 71% of reported losses with these machines. During the same period, when a reported cryptocurrency fraud loss did not involve the use of a BTM, about 72% of losses were reported by people 18 to 59. Most of these losses were to fake cryptocurrency investment opportunities. Percentage calculations exclude reports that did not include information on consumer age.

[11] Phone calls were the initial contact method in approximately 47% of these reports, followed by online advertisements or pop-ups (16%) and emails (9%). Reports that indicate online advertisement or pop-up as the contact method usually describe fake computer security alerts. People have reported that security pop-ups and email messages contain a phone number to call for help.

[12] Reports show that scammers direct people to specific BTM locations and many consumers name the BTM operator in their reports. These details show a pattern that suggests scammers prefer some operators over others and that these preferences have changed over time. While the reports don’t tell us why this might be, differences in fraud prevention measures taken by various operators likely play a role.