Crypto ATMs fraud and scams on the rise in the US: report

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 in an offshore crypto wallet and the woman has never recovered it, the report said.

The Federal Bureau of Investigation (FBI), offering its first-ever national estimate of the losses, told OCCRP that crypto ATM scams resulted in the theft of over $120 million from the public in 2023. The figure does not include risks related to national security and money-laundering.

Crypto ATM fraud – “hard to track”

The OCCRP says the rising cases of scams related to crypto ATMs, or crypto teller machines, are due to several factors.

Among these is the lack of stringent identification requirements by most crypto ATM operators. There’s also the issue of inconsistent regulations across states, while fraudsters are finding it easy to undertake these financial crimes because they find it easier to “cover their tracks,” particularly when they are offshore-based perpetrators.

Authorities say on-chain crypto transfers are traceable. However, they add that scammers are employing obfuscation tactics that make it difficult to trace coins, including mixers and bridges.

According to the FBI, the public reported over 4,300 cryptocurrency ATM cases in 2023, with 2,000 of these from users aged 60 or older. However, only 10% of these cases end up with some kind of restitution.

More than 31k crypto ATMs in US

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 happened. For example, a New York court in April 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. The network allegedly channeled over $5.6 million cash into crypto.

Sonny Meraban, former CEO of Bitcoin of America, was also convicted in 2023 and given five years of probation. He also forfeited $3.9 million in Bitcoin.

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