Greg's Corner

Bitcoin ATMs Are a Goldmine for Scammers

By Greg Collier

Bitcoin ATMs are becoming a familiar sight across the country, marketed as a fast and convenient way to buy cryptocurrency. Yet behind the promise of easy access lies a growing fraud problem that has already cost Americans hundreds of millions of dollars. Federal authorities report that losses tied to Bitcoin ATM schemes nearly doubled in 2024, approaching a quarter of a billion dollars. Consumer advocates warn that the true impact may be even higher, as many victims never come forward.

These machines differ significantly from traditional bank ATMs, which are tied to tightly regulated financial institutions and monitored for suspicious activity. Bitcoin kiosks are generally classified as money service businesses, a category with far fewer oversight requirements. While a large transfer at a bank might trigger fraud alerts, require identity confirmation, or even be delayed pending review, many Bitcoin ATMs allow users to deposit thousands of dollars in cash with minimal verification. That lack of scrutiny is precisely what makes them so attractive to scammers.

Compounding the issue is the way these machines are deployed. Unlike ATMs operated by major banks, many Bitcoin kiosks are owned by small private companies and placed in locations with little or no supervision. It is not uncommon to find them in corner stores, vape shops, or twenty-four-hour laundromats where employees rarely intervene. This environment gives scammers the perfect setup to coach victims in real time over the phone, often staying on the line for the entire transaction while instructing them exactly how much to insert and which QR code to scan.

The process itself is simple. Users feed cash into the machine, and the equivalent amount of cryptocurrency is transferred to a designated digital wallet. Scammers pose as investment advisers, fraud investigators, or government agents and persuade victims that the transfer is necessary to secure their accounts, avoid legal penalties, or participate in profit-making opportunities. Once the cash is converted, it becomes nearly impossible to trace or reclaim, allowing organized crime networks, many based overseas, to move stolen funds with little interference.

One Durham, North Carolina, resident learned the hard way after being persuaded that she was participating in a high-yield investment program. She was instructed to feed cash into Bitcoin ATMs in increasing amounts, believing she was moving up to higher tiers of profit. By the time she realized the entire operation was fictitious, more than seventy thousand dollars had vanished.

Advocates say these schemes are no longer isolated incidents. Reports now arrive daily from victims across the country who were persuaded to convert their cash into cryptocurrency under false pretenses. With an estimated forty-five thousand crypto-enabled kiosks nationwide, scammers have found an ideal tool: one that combines the anonymity of digital currency with the accessibility of a corner store. While the individuals operating these scams profit most directly, the businesses hosting the machines benefit as well. Each transaction generates a fee that can range well into the double digits percentage-wise, creating little incentive to slow the flow of illicit transfers.

Until stronger safeguards are in place, the most effective line of defense remains awareness. Scammers rely on pressure, secrecy, and speed. They thrive when targets act alone and make decisions without pausing to verify. Once cash goes into one of these machines, it is essentially gone for good.

Cryptocurrency technology may have legitimate uses, but the rapid expansion of cash-to-crypto kiosks has created fertile ground for exploitation. Without meaningful regulation, the losses will continue to climb quietly, quickly, and often from those least prepared to absorb them.