Crypto ATMs: The Latest Tool in Scammers’ Arsenal

In the past, scammers preferred using gift cards, bank transfers, and payment apps to swindle money from their victims. But scammers have had to adapt as awareness and protections have increased among consumers, law enforcement, and businesses. Their latest tactic involves directing victims to pay at a “crypto ATM,” a new and less familiar method.

About 1 in 17 U.S. adults (6%, or 14.2 million people) have been tricked into converting cash into cryptocurrency or know someone who has fallen victim to this scam. During the first half of 2024 alone, the Federal Trade Commission (FTC) reported staggering $65 million in fraud losses involving crypto ATMs or kiosks, with $46 million of that amount from victims age 50 and over, including those age 60 and older. The actual figure is probably much higher, as many cases of fraud go unreported.

Cryptocurrency kiosks, also known as crypto ATMs, bitcoin ATMs, BTMs, or virtual currency kiosks, are machines that convert dollars into digital currency. While they may look like regular ATMs, criminals can use them as a quick, easy, and hard-to-trace way to steal victims’ cash. They are popping up in gas stations, liquor stores, malls, hotels, and smoke shops. Currently, there are over 80 of these kiosks in Alaska, including in Fairbanks, MatSu, Eagle River, Anchorage, Girdwood, Kenai, and Seward. They go by names like Bitcoin, CoinFlip, Coinme, or RockItCoin.

Imagine this scenario: You receive an unexpected text, email, or phone call from someone trying to deliver birthday flowers but has the wrong address. They are friendly and seem trustworthy. They call you back to thank you for your help, and over the next several months, a friendship blossoms. Then, they share an investment opportunity with you. Then, they introduce you to an investment opportunity. They persuade you to invest a small amount of money online by transferring funds through a crypto ATM. Your new friend guides you through the process step by step. You see your funds grow on a legitimate-looking website. You withdraw some of your profits, which convinces you that this is a genuine investment opportunity. So, you invest large amounts of money, and your account shows it grows rapidly. When you need to make a home repair and attempt to withdraw a large sum of money, your account vanishes. You try to call your “new friend,” but the number is no longer working. This has happened in Alaska.

The types of scams haven’t changed; only the payment method has. Scammers are now turning to crypto ATMs to get their hands on your money. They might pose as an investment manager, impersonate the IRS, FBI, or Social Security, or even use an online romantic relationship to persuade you to put your cash into a crypto ATM.

Scammers love using crypto ATMs because transactions can be completed in seconds and are almost impossible to reverse or trace once sent. Criminals are finding great success in convincing targets to use crypto ATMs because they aren’t well understood. Often, scammers instruct victims to use the ATM at a convenience store, and the victim doesn’t even realize it’s a cryptocurrency ATM.

Here are a few tips to protect yourself: Be wary of anyone who asks you to pay at a crypto ATM… It’s probably a scam. Use a credit card instead, as it offers protection against scams. Scams typically have three common elements: an unexpected contact, a surge of emotion, and a sense of urgency. If you encounter these signs, stop the communication, take a moment to think about the situation, and verify the legitimacy of the business online. No legitimate company or government entity will ever email, text, or message you on social media to ask you to deposit money into a Bitcoin ATM.

AARP Alaska is teaming up with legislators this year to introduce a bill to protect people from Crypto ATM scams. For more information, visit www.aarp.org/ak. You can also learn how to spot and avoid scams with the AARP Fraud Watch Network at www.aarp.org/fraudwatchnetwork. If you suspect a scam, call our free helpline at 877-908-3360 (Monday through Friday, 5 am to 4 pm AK time) and speak with one of our fraud specialists about what to do next. Remember, if you can spot a scam, you can stop a scam. Share scam information with your family and friends.