Consumers lost $114 million to scams involving Bitcoin ATMs last year, amounting to a tenfold increase from just three years ago, according to a new report from the Federal Trade Commission.
This year's losses are on track to be even higher, with an estimated $65 million reported for the first six months of 2024 alone, the FTC said Tuesday. It also noted that since the vast majority of financial fraud goes unreported, the numbers likely represent just a small fraction of the actual amount of money lost to these kinds of crimes.
Bitcoin ATMs are terminals found in gas stations, stores and other busy locations. They often look like regular ATMs, but instead of dispensing cash, they allow consumers to exchange money for largely untraceable and easily transferable cryptocurrency. That's made them an increasingly popular tool for scammers.
The lies scammers tell aren't any different than those used in other kinds of financial scams and often start with an unsolicited email, text message or phone call that claim to have spotted suspicious activity or unauthorized charges on a victim's account.
The scammers might pose as a tech company like Microsoft or Apple or falsely claim to be law enforcement or a federal agent, the FTC says. In any of those cases, their goal is to convince the victim that their money isn't safe and needs to be moved.
That's where the Bitcoin ATMs come in. The scammers will tell victims to take their money out of their bank accounts and direct them to a nearby Bitcoin ATM to deposit it, falsely claiming that this will either fix the problem with their account or keep their money safe. Sometimes they'll even refer to the ATMs as "safety lockers," the FTC says.
They'll text the victim a QR code to scan at the machine. And once they do that, the cash -- now crypto -- is sent directly to the scammer's wallet and will most likely never be recovered.
Individual losses from these kinds of scams are often steep. For the first six months of this year, the median reported loss was $10,000, the FTC says. In addition, people 60 and older were more than three times as likely as younger people to report a loss in the first half of this year.
How to avoid getting scammed
Here are some tips from the FTC and CNET for how to keep yourself from becoming the victim of a financial scam.
Ignore unsolicited emails. This goes for text, messages sent through social media and phone calls too. If someone reaches out to you to say that one of your financial accounts has been compromised, don't respond or click on links in emails or texts. Instead, call your bank or credit card company directly.
Be skeptical of urgency. If anyone for any reason says you need to send them money right away or move your money from your bank account, stop and think before you do. It's almost always a scammer. Even if you think it might be a legitimate communication, make some calls before you take action.
Crypto payment requests are scams. Legitimate companies and financial institutions will never ask for payment in the form of crypto. And government officials will never ask you to move money to a crypto wallet to keep it safe. If someone tells you to do either of those things they're a scammer. On a related note, requests for payment in the form of gift cards are undoubtedly scams, too.
Report scam messages. Most email programs have buttons that let you report spam or phishing. Scam text messages can be reported by forwarding them to 7726 (SPAM).