Bob Sullivan
Finally, crypto ATMs are getting a bit of the attention that they deserve.
As host of AARP’s The Perfect Scam podcast, I talk to crime victims every week. A few years ago, a majority had their money stolen via bogus gift card transactions. Today, it feels like almost every person is the victim of a cryptocurrency scam, and many have their money stolen through crypto ATMs.
I’m sure you’ve seen these curious machines in convenience stores and gas stations, which are also known as convertible virtual currency (CVC) kiosks. Put cash in, and you can send or receive crypto around the world.
Crypto ATMs, in theory, democratize crypto. Someone who wouldn’t feel comfortable buying crypto online can do so in a familiar way, using a machine that works just like the ones we’ve used to get cash for many years. Perhaps you won’t be surprised to hear that crypto ATMs are a bad deal. Set aside crypto volatility and high transaction fees for a moment: No one who feels uncomfortable opening an online crypto account should be buying or transmitting crypto. Period.
And yet, these crypto ATMs are sprouting up like weeds, at a time when old-fashioned ATMs are disappearing. There were roughly 4,000 crypto ATMs in 2019, and there were more than 37,000 by January of this year.
I know that because the U.S. Treasury’s Financial Crime Enforcement Network — FinCEN — published a notice Aug. 4 warning financial institutions about crypto ATMs and their connection to crime. The agency also said many of these devices are being put into service without registering as money service businesses with FinCEN, and their operators are sometimes failing to report suspicious activity.
As I mentioned, there really isn’t a use case for these fast-proliferating devices. Well, there’s one. When a criminal has a victim confused and manipulated, the fastest way to steal their money is to persuade them to drive to the nearest crypto ATM and feed the machines with $100 bills. I’ve talked to countless victims who’ve told me harrowing, tragic tales of crouching in the dark corner of a gas station, shoving money into one of these machines, terrified they are being watched. In fact, they aren’t. Employees are told not to get involved. So victims drive away, their money stolen in the fastest way possible. The transfer is nearly instant, faster than a wire transfer, and irrevocable.
That means it’s the perfect gadget for criminals like the Jalisco Cartel in Mexico to steal cash from Americans. Particularly elderly Americans, FinCEN says. According to FTC data, people aged 60 and over were more than three times as likely as younger adults to report a loss using a crypto ATM.
“These kiosks have increasingly facilitated elder fraud, especially among tech/customer supports scams, government impersonation, confidence/romance scams, emergency/person-in-need scams, and lottery/sweepstakes scams,” FinCEN said. And the losses are huge. “In 2024, the FBI’s IC3 received more than 10,956 complaints reporting the use of CVC kiosks, with reported victim losses of approximately $246.7 million. This represents a 99 percent increase in the number of complaints and a 31 percent increase in reported victim losses from 2023.”
In other words, we have a five-alarm fire on our hands. One that’s been blazing in broad daylight for at least a year and yet…every week, I continue to interview victims who crouched near a crypto ATM for days on end, stuffing bills into these machines, thinking they were doing the right thing.
Banks and kiosk operators should do much more. The current daily limits on transactions aren’t low enough; victims are just instructed to drive all over town, or make daily deposits for weeks on end, so criminals can steal hundreds of thousands of dollars this way. Regulators should do more, too. If the majority of transactions flowing through a certain kiosk can be traced to fraud, the machine should be removed immediately. It’s not impossible. The UK ordered all cryto ATMS shut down recently.
Tech can enhance our lives; it can also be weaponized. And when it is, we shouldn’t stand idly by and act as if we are powerless to stop the pain it is causing our most vulnerable people.