Scammers are using crypto ATMs to steal millions of dollars in the U.S., according to a new report by 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 fraudster posing as a Federal Trade Commission agent. The money ended up in an offshore crypto wallet, and the woman has never recovered it. The Federal Bureau of Investigation (FBI) estimates that crypto ATM scams resulted in the theft of over $120 million from the public in 2023.
The rising cases of scams related to crypto ATMs are due to several factors, according to the OCCRP. This includes the lack of stringent identification requirements by most crypto ATM operators and inconsistent regulations across states. Fraudsters are finding it easy to undertake these financial crimes because they can “cover their tracks,” particularly when they are offshore-based perpetrators. Authorities say on-chain crypto transfers are traceable, but scammers are employing obfuscation tactics that make it difficult to trace coins, including mixers and bridges.
The public reported over 4,300 cryptocurrency ATM cases in 2023, with 2,000 of these from users aged 60 or older, according to the FBI. However, only 10% of these cases end up with some kind of restitution. Law enforcement says fraud at Bitcoin ATMs has increased with the surge in the number of installations in the country. Market data platform CoinATMRadar estimates there are over 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 fraud, a number of major arrests and prosecutions have taken place. For example, a New York court sentenced Victoria Jacobs, accused of using crypto ATMs to channel $18,000 to a designated criminal group, to 18 years in prison. Robert Taylor is awaiting sentencing after the New York State Supreme Court found him guilty in a case in which the prosecution alleged he availed over 40 unlicensed crypto ATMs for use by criminals, channeling over $5.6 million cash into crypto. Sonny Meraban, former CEO of Bitcoin of America, was convicted in 2023 and given five years of probation, forfeiting $3.9 million in Bitcoin.
In conclusion, crypto ATM fraud is a growing concern in the U.S., with scammers using various tactics to steal millions of dollars from the public. The lack of stringent identification requirements by most operators, inconsistent regulations across states, and the use of obfuscation tactics by fraudsters make it difficult for authorities to track and recover stolen funds. Despite the surge in the number of crypto ATM installations in the country, law enforcement agencies are making significant arrests and prosecutions to combat this type of financial crime. It is important for users to be aware of the risks associated with crypto ATMs and take necessary precautions to protect their funds.