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

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As a seasoned crypto investor with several years of experience under my belt, I have seen the good, the bad, and the ugly sides of this dynamic and rapidly evolving market. The recent reports of crypto ATM scams, as detailed in the OCCRP and Miami Herald investigation, are a concerning development that hits close to home for me.

According to a recent investigation by the Organized Crime and Corruption Reporting Project (OCCRP) and the Miami Herald, crooks are swindling millions of dollars from crypto automated teller machines (ATMs) across the United States.

A 77-year-old woman from Chicago fell victim to a scam where she lost $9,000. The imposter represented himself as a representative of the Federal Trade Commission. The funds were transferred into an offshore cryptocurrency wallet, leaving the woman unable to retrieve her money.

In 2023, the Federal Bureau of Investigation (FBI) disclosed for the first time that crypto ATM scams led to the swindling of more than $120 million from the general public. This amount does not encompass potential hazards pertaining to national security or money laundering concerns.

Crypto ATM fraud – “hard to track”

According to the Organized Crime and Corruption Reporting Project (OCCRP), the increasing number of scams associated with cryptocurrency automated teller machines (ATMs) or crypto teller machines can be attributed to various reasons.

The lax identification procedures at the majority of crypto ATM stations is a significant concern. Additionally, there’s a problem of varied regulations from state to state. Criminals are thriving in these financial crimes as they can more easily conceal their activities, especially when they operate from offshore locations.

Experts note that cryptocurrency transactions recorded on the blockchain are traceable. Yet, they caution that criminals use complex methods like mixers and bridges to obscure the origin of their ill-gotten gains, making it challenging to follow the coin’s trail.

In 2023, the FBI documented over 4,300 instances of cryptocurrency ATM misuse. Among these incidents, approximately 40% were reported by individuals aged 60 and above. Regrettably, just 1 in 10 cases resulted in some form of compensation.

More than 31k crypto ATMs in US

According to law enforcement reports, there has been a notable rise in fraud cases linked to Bitcoin Automated Teller Machines (ATMs) across the country. Based on data from CoinATMRadar, the United States now hosts over 32,500 of these cryptocurrency ATMs as of the present day. This number represents an impressive growth from the 26,000 machines counted in November 2021 and a significant leap from the mere 4,210 units that existed in January 2020.

In spite of the increasing incidents of fraud related to cryptocurrency automated teller machines (ATMs), several significant arrests and convictions have taken place recently. For instance, a New York court passed a sentence of 18 years in prison for Victoria Jacobs, who was charged with using crypto ATMs to transfer approximately $18,000 to an organized criminal group, in April this year.

Robert Taylor faces sentencing following his conviction by the New York State Supreme Court for operating more than 40 unregistered cryptocurrency Automated Telling Machines (ATMs), which were reportedly utilized by criminals to convert over $5.6 million in cash into cryptocurrencies.

In 2023, Sonny Meraban, a past CEO of Bitcoin of America, received a probation sentence lasting five years as part of his conviction. Additionally, he was ordered to relinquish $3.9 million worth of Bitcoin.

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2024-07-15 17:26