Scammers Increasingly Use Crypto ATMs and Kiosks in Their Schemes

Scammers Increasingly Use Crypto ATMs and Kiosks in Their Schemes

Scammers are increasingly using cryptocurrency ATMs and kiosks in their schemes, exploiting these digital exchange points to deceive unsuspecting individuals.

Recently, a woman from Troy, Michigan, was scammed and directed to a Bitcoin kiosk at a gas station. This scam started with an email claiming an accidental overpayment of $3,966, which needed to be refunded.

Believing she owed money, the woman was told to withdraw cash and deposit it into a Bitcoin ATM. After doing so, she was informed that not all the money had been received, and that she still owed $1,000.

To clear this fake debt, the woman was instructed to buy two $500 gift cards and read the serial numbers to the scammers over the phone. In the end, she lost a total of $4,966.

How Crypto ATMs Facilitate Fraud

Once cash is deposited into a cryptocurrency ATM or kiosk, it is immediately converted into digital currency. This conversion allows scammers to transfer the funds to other accounts, often located overseas, making recovery nearly impossible.

Older Adults Targeted in Crypto Scams

In 2023, the FBI’s Internet Crime Complaint Center received over 2,000 complaints involving the use of cryptocurrency ATMs and kiosks. These complaints came primarily from individuals over the age of 60.

The decentralized nature of cryptocurrency makes it difficult for law enforcement to trace stolen funds. The digital wallets receiving the money can be based anywhere globally.

Other Emerging Scam Tactics

Apart from cryptocurrency schemes, there has been a rise in what the FBI refers to as the “phantom hacker” scam, which emerged in 2023. These scams involve dispatching couriers to collect cash or valuable items from victims as part of larger call center scams, often impersonating tech support or government officials.

Earlier this year, federal agencies, including the FBI and the U.S. Department of Justice, targeted nearly 3,000 “money mules.” These individuals collect and transfer money for international fraud rings. Some crime networks even recruit college students to collect payments from victims and open fake bank accounts to launder illegal proceeds.

Crypto Romance Scams on the Rise

Crypto romance scams are also causing significant financial losses among US citizens. A recent victim, Shreya Datta, a 37-year-old tech professional from Philadelphia, was left financially devastated, losing $450,000 to a cryptocurrency romance scam.

Erin West, Deputy District Attorney in Santa Clara, California, has reported receiving an average of 5-6 emails daily from individuals who have fallen victim to “pig butchering” scams.

“We receive 5-6 emails a day from victims of pig butchering. The most recent victim lost $5 million, and that’s not even the largest amount lost to this scam,” West stated.

Adding to the problem, stolen funds are funneled overseas to transnational criminal organizations in Myanmar and Cambodia. These scams often involve trafficked individuals, who are forced to work as virtual slaves to execute the pig butchering schemes.

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