Bitcoin ATMs (or BTMs)⁽¹⁾ have been appearing in supermarkets, gas stations and other busy areas for years.⁽²⁾ For some, they are a convenient way to buy or send cryptocurrency, but for fraudsters, they have become an easy way to steal. Data from the FTC Consumer Sentinel Network shows that fraud losses on BTMs are skyrocketing, increasing nearly tenfold from 2020 to 2023 and surpassing the $65 million mark in the first half of 2024 alone.⁽³⁾ Since the vast majority of fraud cases go unreported, this probably reflects only a fraction of the actual damage.⁽⁴⁾

Cryptocurrencies have become an important payment method for scams in recent years, along with a massive increase in crypto payments for fake investment opportunities.⁽⁵⁾ But cryptocurrencies have now become a popular payment method for many other scams.⁽⁶⁾ Widespread access to BTMs has helped make this possible. Reports of losses from BTMs predominantly involve government, business, and technical support fraud.⁽⁷⁾ And when people did use BTMs, the losses they reported were exceptionally high. In the first six months of 2024, the median loss people reported was $10,000.⁽⁸⁾

In the first half of the year, people aged 60 and over were more than three times as likely to report a loss using a narcotic drug as younger adults.⁽⁹⁾In fact, more than two out of every three dollars lost to fraud at these machines went to older adults.⁽¹⁰⁾

BTM scams work in many different ways. Many begin with a phone call or message about alleged suspicious activity or unauthorized charges to an account.⁽¹¹⁾ Others will get your attention with a fake security alert on your computer, often posing as a company like Microsoft or Apple. These are the kinds of things that are hard to ignore, and that’s the point. From there, the story escalates quickly. They may claim that all your money is at risk, or that your information has been linked to money laundering or even drug smuggling. To up the ante, the scammer might put a fake government agent on the phone – who might even pretend to be an employee of the “FTC.”

And how do BTMs fit into this story? Scammers claim that depositing cash into these machines will protect your money or solve the problem they have invented. They have even dubbed BTMs “safe deposit boxes.” They instruct you to go to your bank to withdraw cash. They then send you to a nearby BTM location – often a specific one – to deposit the cash you just withdrew from your bank account.⁽¹²⁾ They send you a QR code via SMS, which you have to scan at the ATM. The money you deposited then goes directly into the fraudster’s wallet.

How can you identify and avoid these scams?

• Never click on links or respond directly to unexpected calls, messages or pop-ups on your computer. If you believe it is a legitimate call, contact the company or agency, but look up their number or website yourself. Do not use the number you received from the caller or from the message.
• Go slow. Scammers are trying to pressure you, so stop and evaluate. Before you do anything else, talk to someone you trust.
• Never withdraw cash if you receive an unexpected call or message. Only scammers will advise you to do so.
• Don’t believe anyone who says you need to use a Bitcoin ATM, buy gift cards, or transfer money to protect it or fix a problem. Real companies and government agencies will never do that – and anyone who asks is a scammer.

To identify and avoid scams, visit ftc.gov/scams. Report scams to the FTC at ReportFraud.ftc.gov.

(1) Machines that allow consumers to purchase cryptocurrencies are commonly referred to as Bitcoin ATMs or BTMs. However, these machines often process other cryptocurrencies in addition to Bitcoin and can be subject to fraud.

(3) These and other figures in this Spotlight are estimates based on a keyword analysis of disclosures included in reports where cryptocurrency was identified as a payment method. Not all reports identify a payment method or provide sufficient detail in the report text to determine whether a BTM was used.

(4) See Anderson, KB, To Whom Do Victims of Mass-Market Consumer Fraud Complain?, p. 1 (May 2021), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3852323(Studies found that only 4.8% of people who fell victim to mass consumer fraud complained to the Better Business Bureau or a government agency.)

(6) In the first half of 2024, cryptocurrencies were the payment method with the highest reported loss volume from tech support scams and job scams, and the second most costly method after bank transfers for business scams, government scams, romance scams, and identity fraud involving family and friends.

(7) In the first half of 2024, approximately 86% of individuals reporting fraud losses using a BTM reported that the loss was government or business identity fraud and/or technical support fraud, excluding reports categorised as unspecified.

(8) In the first half of 2024, the average loss from fraud involving cryptocurrencies as a payment method (including reports with and without the use of BTM) was $5,400. The average loss from fraud in general was $447.

(9) This comparison of reporting rates for older and younger consumers is normalised based on the population size of each age group using the 5-year estimates from the Census Bureau’s 2018-2022 American Community Survey, excluding reports that did not include information on consumer age.

(10) In the first half of 2024, people aged 60 and over reported losing $46 million by using BTMs, representing approximately 71% of reported losses from these machines. During the same period in which a reported cryptocurrency scam loss was not associated with the use of a BTM, approximately 72% of losses were reported by people aged 18 to 59. Most of these losses were due to fake cryptocurrency investment opportunities. Percentage calculations exclude reports that did not include information on consumer age.

(11) In about 47% of these reports, phone calls were the first contact method, followed by online advertisements or pop-ups (16%) and emails (9%). Reports that indicated online advertisements or pop-ups as a contact method typically described fake computer security alerts. People reported that security pop-ups and email messages included a phone number to call for help.

(12) Fraudsters are reported to direct people to specific BTM locations, and many consumers identify the BTM operator in their reports. These reports reveal a pattern that suggests that fraudsters prefer certain operators over others and that these preferences have changed over time. Although the reports do not tell us why this might be the case, differences in the fraud prevention measures of different operators likely play a role.