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Fraudsters have sufficient funds, according to a September advisory from the Federal Trade Commission (FTC) warning the public of a rising racket: bitcoin ATM (or BTM) scams.
“Fraud losses at BTMs are skyrocketing, increasing nearly tenfold from 2020 to 2023, and topping $65 million in just the first half of 2024,” the Sept. 3 memo stated.
Coin ATM Radar puts the current US bitcoin ATM count at over 31,475—up from 3,353 just five years ago.
A typical scenario, according to the FTC: Fraudsters concoct a fake problem—in many cases it’s “a call or message about supposed suspicious activity or unauthorized charges on an account”—where the fix involves taking out cash and depositing it into a nearby BTM location. The scammer then texts a QR code to scan at the machine, and the money moves to the hoodwinker’s wallet.
And the social engineering tactic pays. In the first six months of 2024, the average cryptocurrency loss (involving a BTM or otherwise) reached $5,400, according to the FTC’s report. The median fraud loss, in general, was only $447.
The swindle, which the FTC said typically involves an impersonation of business, government, or tech support, especially impacts seniors; individuals 60 and over reported losing $46 million using BTMs—about 71% of the reported losses in H1 24.
The FBI, in its investigation of 2023’s overall fraud activity, found that investment fraud “with a reference to cryptocurrency” increased by 53%. While the FBI then noted that many of the scams enticed “with the promise of lucrative returns on their investments,” the fraud that the FTC warns of conveys the promise of devastating losses.
“[Imposters] might say all your money is at risk, or your information has been linked to money laundering or even drug smuggling,” according to the FTC’s report, written by senior data researcher Emma Fletcher.
FTC researchers based their BTM fraud stats on keyword analysis of the FTC’s cyber tool and complaint database known as the Consumer Sentinel Network
“Since the vast majority of frauds are not reported, this likely reflects only a fraction of the actual harm,” Fletcher wrote.