FTC Reports 1,000% Surge in Crypto Scams Involving Bitcoin ATM

2 min read | September 04, 2024 11:06 PM AEST | By Team Kalkine Media

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FTC Reports 1,000% Surge in Crypto Scams Involving Bitcoin ATM — Image source: Shutterstock

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Scams involving Bitcoin ATMs have surged dramatically, with the Federal Trade Commission (FTC) reporting a tenfold increase in such incidents since 2020. Fraudsters are exploiting the anonymity and speed of cryptocurrency transactions, deceiving victims into transferring funds through Bitcoin ATMs under false pretenses.

The FTC's data reveals that losses from {Bitcoin} (BTC) ATM scams surpassed $110 million in 2023, with older adults, particularly those aged 60 and above, being disproportionately affected. Consumers in this age group are three times more likely to fall victim to these scams.

The FTC has issued a warning emphasizing that legitimate agencies or companies will never demand payment in Bitcoin or other cryptocurrencies through Bitcoin ATMs. “Neither Bitcoin nor the ATM will protect your money,” the FTC stated. “There is no such thing as a government Bitcoin account or digital wallet.”

In response to the growing concerns, Bitcoin Depot, a major Bitcoin ATM operator, has taken steps to enhance consumer protection. A spokesperson for Bitcoin Depot noted that the company posts scam warnings on its kiosks and has implemented screen prompts to alert users about potential scams. “This is a common practice for any legitimate kiosk operator,” the spokesperson explained.

For added security, Bitcoin Depot advises consumers to avoid sending Bitcoin or other cryptocurrencies to unknown digital wallets or individuals they do not personally know. The company also collaborates with regulators and law enforcement to support customers and address misuse of Bitcoin ATMs.

Additionally, there is a push for increased regulation of Bitcoin ATMs at the local government level. On August 7, the Chico, California government committee discussed regulating Bitcoin ATMs more like traditional banking services. Chief Administrative Officer Andy Pickett mentioned that each jurisdiction would need to pass its own ordinance, which could face legal challenges.

Both the FTC and industry leaders urge consumers to exercise caution, verify the legitimacy of transactions, and stay vigilant to protect themselves from falling victim to cryptocurrency scams.

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