Bitcoin ATMs are largely becoming the centers of crypto fraud schemes, according to law enforcement agencies around the country.
Bitcoin ATMs and the Problems They Attract
For example, one woman from the city of Clive in Polk County, Iowa, was involved in a bitcoin ATM scam that saw her lose more than $6,600. She received a call from someone claiming to be part of the Polk County Sheriff’s office, and the caller said that if she didn’t go to her nearest crypto ATM and send the money to a specific address, she would be arrested.
Both the Clive Police Department and the Polk County Sheriff’s Office are working together to see that the scammers are brought to justice. They have since put out a joint statement warning residents that if they receive calls like the one discussed above, they should ignore them at all costs and immediately report them to their local police chiefs. They also said that no law enforcement agency will ever call a specific individual and request a bitcoin or crypto payment of any kind.
Lastly, the statement says that often, money delivered through a bitcoin ATM is virtually untraceable, and that once it’s sent off or gone, it will be very difficult to get back, so residents need to keep a sharp eye out and maintain protection for themselves and their money as best they can.
It used to be that most scammers were out trying to nail individual wallets or tackle crypto exchanges. However, crypto ATMs are very easy to use per blockchain analysis firm Chainalysis, and as a result, they have attracted far more people out there looking to defraud or intimidate others. The company announced in a new report:
An ATM similar to the ones they use for fiat may offer what appears to be the easiest way to initiate a cryptocurrency transaction, as users can simply insert cash, type in a cryptocurrency address, and complete their transfer.
The Federal Bureau of Investigation (FBI) has also put out a statement telling people to be wary of bitcoin ATMs given that they often attract the attention of fraudsters. A warning from Connecticut police also says that one of the most dangerous trends out there involves romance scams, in which people pretend to look for love online only to latch onto victims and find ways to drain them of their crypto investments.
Be Aware!
The police said:
Criminals create a false sense of urgency and trick victims into withdrawing cash from their bank account. The scammer then directs the consumer to deposit the cash into a virtual currency kiosk.
The problem has gotten so bad that last March, the Financial Conduct Authority (FCA) in the U.K. announced that it was banning all crypto ATMs.
