Crypto ATM Industry Takes a Worrying Turn

The cash-to-crypto industry, dominated by crypto ATMs, has processed at least $160 million in illicit transactions since 2019, according to research by blockchain analytics firm TRM Labs.

The report, released today, explored why authorities around the world are concerned about the increasing use of crypto ATMs, which send crypto to a digital wallet using fiat currency. In 2023 alone, 79% of transfers exceeding $30 million were made to addresses associated with fraud.

Crypto ATMs were back in the spotlight earlier this month when Germany’s financial regulator BaFin seized 13 ATMs in a raid, seizing around 250,000 euros ($280,000) in cash. The report said such raids were just part of a “much larger scourge”, with the UK reportedly seizing 26 ATMs by 2023, 18 in Texas and more than 50 in Ohio.

“As illicit actors use cryptocurrencies to move funds across borders faster, crypto ATMs face money laundering vulnerabilities due to the lack of account opening controls,” the report said.

Of the 15,000 complaints last year involving digital asset scams targeting people aged 60 and over, 2,000, or about 13%, were made via bitcoin ATMs.

Australia is becoming the third-largest market for crypto ATMs, with the number of machines increasing 17-fold in two years. The report said authorities in the country have identified the kiosks as a major vulnerability for money laundering.