3 Min. Read

As of the latest count, there are over 30,000 cryptocurrency ATMs (BTMs) in the U.S., making it easy for people to buy and sell cryptocurrency quickly.

What Are Bitcoin ATMs and How Do They Work?

Bitcoin ATMs function like traditional ATMs, but instead of dispensing cash, they allow users to buy or sell Bitcoin using cash or a debit card, essentially functioning as cryptocurrency vending machines. They appeal to users who prefer not to go through a bank or share financial data. However, they often come with high fees, a lack of oversight, and no customer service.

What is Cryptocurrency and How Does It Work?

Cryptocurrency, or “crypto,” is a digital currency that can be used to purchase goods and services or traded for profit. It operates through decentralized networks, without the involvement of banks, and is typically stored in a digital wallet. The most widely used cryptocurrency is Bitcoin, and its value is driven by demand, similar to collectibles or art.

As with any expanding technology, scammers are quickly exploiting it to their benefit, favoring Bitcoin ATMs because they are largely unregulated, making the recipient of the funds difficult to trace.

In 2023, Bitcoin ATM-related scams resulted in $11 million in reported consumer losses. Due to the lack of regulation, victims often have little to no recourse to recover stolen funds.

The Federal Trade Commission (FTC) reports that individuals aged 60 and older are over three times more likely than younger people to fall victim to BTM scams.

To combat this, some states have begun limiting Bitcoin ATM transactions to $1,000 per day, reducing the amount scammers can steal in a single incident.

The most common form of Bitcoin ATM scams is through vishing.

What is Vishing?

Vishing, or voice phishing, has become one of the most common financial scams in recent years. In 2023 alone, 68.4 million Americans were affected by vishing scams, with victims losing a total of $1.2 billion.

Vishing occurs when scammers use phone calls to impersonate banks or other well-known institutions to trick victims into giving out personal information or making payments, often being told to deposit cryptocurrency into a nearby Bitcoin ATM, sending the funds directly into the scammer’s digital wallet. These calls may be made by real people or through pre-recorded robocalls.

Common vishing schemes include:

• A caller claims your computer has been hacked.
• Someone says your bank accounts are connected to drug smuggling or money laundering.
• A person impersonating a bank executive says there have been unauthorized charges on your credit card or that your online account has been compromised.
• Someone posing as law enforcement saying a family member is in trouble and needs help.

Many people answer these spoof calls because the fake phone number appears familiar. This tactic is called “spoofing.” Scammers make the call appear as if it’s coming from your area code or from a number just a few digits off from your own.

How to Protect Yourself from Vishing and Spoofing

One of the best ways to protect yourself is by learning to recognize scams that use spoofing so you can avoid picking up or engaging. Here are some tips to help.

• Be skeptical—especially if the caller asks for personal or financial information.
• Use a reverse phone lookup tool or search the number on Google to see if it’s connected to known scams.
• Don’t press any buttons if prompted. Hang up immediately.
• Never trust anyone who instructs you to use a Bitcoin ATM to “protect” your money or fix a problem. No legitimate business or government agency will ever ask you to do this. Anyone who does is a scammer.

What to Do If You Suspect a Scam

If you believe you’ve been the victim of a vishing scam, visit Marine Credit Union’s Help Guide for Members That Have Experienced Fraud.

Other ways to report scam phone numbers, calls and emails include:

• Federal Trade Commission (FTC): ReportFraud.ftc.gov
• Consumer Financial Protection Bureau (CFPB): consumerfinance.gov/complaint
• Internet Crime Complaint Center (IC3): ic3.gov
• U.S. Securities and Exchange Commission (SEC) (for investment scams): sec.gov/tcr

Scammers are constantly adapting, and cryptocurrency ATMs have opened new doors for fraud. The more you understand how these scams work, the better equipped you are to protect yourself and those you care about. When in doubt, take a step back, verify the facts, and never act on urgency or fear. Staying informed is your best defense.