Crypto ATMs fraud and scams on the rise in the US: report

Scammers are using cryptocurrency ATMs to steal millions of dollars in the United States, according to a new report from the Organized Crime and Corruption Reporting Project (OCCRP) and the Miami Herald.

In one case, a 77-year-old Chicago woman lost $9,000 in cash to a scammer posing as a Federal Trade Commission agent. The money ended up in an offshore crypto wallet, and the woman never recovered it, the report said.

In providing its first national estimate of losses, the Federal Bureau of Investigation (FBI) told OCCRP that crypto ATM scams led to the theft of over $120 million from the public in 2023. The figure does not include risks related to national security and money laundering.

Crypto ATM scam – “hard to track”

OCCRP says the increase in scams involving cryptocurrency ATMs is due to several factors.

These include the lack of strict identification requirements for most crypto ATM operators. There is also the issue of inconsistent regulations across states, and scammers find it easier to commit these financial crimes because they find it easier to “cover their tracks,” especially when the perpetrators are offshore-based.

Authorities say on-chain crypto transfers are traceable, but they add that scammers use obfuscation tactics, including mixers and bridges, that make it harder to track coins.

According to the FBI, the public reported over 4,300 crypto ATM incidents in 2023, with 2,000 of those involving users aged 60 and over. However, only 10% of these cases result in some form of compensation.

More than 31,000 crypto ATMs in the US

Law enforcement officials say bitcoin ATM scams have been on the rise as the number of installations in the country has increased. Market data platform CoinATMRadar estimates there are more than 32,500 such installations in the U.S., up from 26,000 machines in November 2021 and just 4,210 in January 2020.

Despite the rise in crypto ATM scams, there have been a number of major arrests and prosecutions. For example, in April, a New York court sentenced Victoria Jacobs to 18 years in prison for allegedly transferring $18,000 to a designated criminal group using crypto ATMs.

Robert Taylor is awaiting sentencing after the New York State Supreme Court found him guilty in a case in which the prosecution alleged he used more than 40 unlicensed crypto ATMs for use by criminals. The network allegedly moved more than $5.6 million in cash into crypto.

Sonny Meraban, the former CEO of Bitcoin of America, was also found guilty in 2023 and sentenced to five years probation. He also forfeited $3.9 million worth of Bitcoin.