Crypto ATMs fraud and scams on the rise in the US: report
A new report by the Organized Crime and Corruption Reporting Project (OCCRP) and the Miami Herald has revealed a concerning trend of scammers using crypto ATMs to steal millions of dollars in the United States. The report highlights a case where a 77-year-old woman from Chicago lost $9,000 in cash to a fraudster posing as a Federal Trade Commission agent. The money was transferred to an offshore crypto wallet, and the woman has never been able to recover it.
According to the Federal Bureau of Investigation (FBI), crypto ATM scams resulted in the theft of over $120 million from the public in 2023. This staggering figure does not even account for risks related to national security and money laundering. The FBI also noted that the rising cases of scams related to crypto ATMs are challenging to track due to several factors.
One of the main reasons for the increase in crypto ATM fraud is the lack of stringent identification requirements by most operators. Additionally, inconsistent regulations across states make it easier for fraudsters to carry out financial crimes. Authorities also mentioned that scammers are using obfuscation tactics such as mixers and bridges to make it difficult to trace coins.
In 2023, the public reported over 4,300 cryptocurrency ATM cases, with a significant portion coming from users aged 60 or older. However, only 10% of these cases resulted in some form of restitution. The surge in crypto ATM installations in the US has also contributed to the rise in fraud cases. Market data platform CoinATMRadar estimates that there are over 32,500 crypto ATMs in the country, up from just 4,210 in January 2020.
Despite the alarming increase in crypto ATM fraud, law enforcement has made significant arrests and prosecutions. For example, Victoria Jacobs was sentenced to 18 years in prison for using crypto ATMs to channel funds to a criminal group. Robert Taylor is awaiting sentencing after being found guilty of operating unlicensed crypto ATMs that channeled millions of dollars into crypto. Sonny Meraban, former CEO of Bitcoin of America, was convicted in 2023 and given five years of probation, along with forfeiting $3.9 million in Bitcoin.
The report serves as a stark reminder of the risks associated with using crypto ATMs and the importance of implementing stricter regulations and security measures to protect users from falling victim to fraud and scams. As the popularity of cryptocurrencies continues to grow, it is crucial for authorities and operators to work together to combat these criminal activities and safeguard the integrity of the financial system.