Bitcoin ATMs set for another record year of scam activity, FTC warns

Americans have fallen victim to Bitcoin ATM scams in record amounts this year, the Federal Trade Commission warns, with losses totaling $65 million through the first six months of 2024. If that pace continues, scams will have taken more than the $114 million lost in 2023, which was almost double the amount swindled in 2022.

The figures come from an advisory the FTC issued Monday, which noted a connection between the availability of Bitcoin ATMs, or BTMs, as a payment method and fraudulent or impersonated demands for money from an official-sounding source.

“Reports of losses using BTMs are overwhelmingly about government impersonation, business impersonation, and tech support scams,” the FTC said. “When people used BTMs, their reported losses are exceptionally high. In the first six months of 2024, the median loss reported was $10,000.”

The FTC notes that “since the vast majority of frauds are not reported, this likely reflects only a fraction of the actual harm.”

Bitcoin ATMs have increased nearly eightfold over the past five years, from 4,250 locations in January 2020 to 32,000 in June of this year. Typically, the FTC said, a scam target receives a call or email about suspicious activity on a financial account they control. Others might get a notice from a major company that might have their payment information, like Microsoft or Apple.

From there, the target is then told a dire story requiring immediate action, lest their money or credit fall into the wrong hands, or even crimes committed with their identity. The BTMs become a way to deposit cash pronto and supposedly resolve the fake crisis.

Americans older than 60 fall prey to these scams in disproportionate numbers, as the demographic usually does for other financial crimes that don’t use crypto or BTMs. The FTC includes a list of tips for those (and their loved ones) who might be targeted by scam notices.

The most helpful seems to be: Slow down. Most scams depend on threats and the cognitive dissonance and urgent action that follow. Talking to anyone, whether it’s a family member or friend, slows the situation and invites a more rational approach.

But also, people should remember that government agencies and legitimate businesses do not resolve disputes by demanding someone use a Bitcoin ATM machine, much less buy and transmit gift cards or move money immediately.

Image via Ideogram

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