US (finally) issues warning about crypto ATMs
What are they good for? Crime
Finally, crypto ATMs are getting a bit of the attention that they deserve.
As host of AARP's The Perfect Scam podcast, I talk to crime victims every week. A few years ago, a majority had their money stolen via bogus gift card transactions. Today, it feels like almost every person is the victim of a cryptocurrency scam, and many have their money stolen through crypto ATMs.
I'm sure you've seen these curious machines in convenience stores and gas stations, which are also known as convertible virtual currency (CVC) kiosks. Put cash in, and you can send or receive crypto around the world.
Crypto ATMs, in theory, democratize crypto. Someone who wouldn't feel comfortable buying crypto online can do so in a familiar way, using a machine that works just like the ones we've used to get cash for many years. Perhaps you won't be surprised to hear that crypto ATMs are a bad deal. Set aside crypto volatility and high transaction fees for a moment: No one who feels uncomfortable opening an online crypto account should be buying or transmitting crypto. Period.
And yet, these crypto ATMs are sprouting up like weeds, at a time when old-fashioned ATMs are disappearing. There were roughly 4,000 crypto ATMs in 2019, and there were more than 37,000 by January of this year.
I know that because the U.S. Treasury's Financial Crime Enforcement Network -- FinCEN -- published a notice Aug. 4 warning financial institutions about crypto ATMs and their connection to crime. The agency also said many of these devices are being put into service without registering as money service businesses with FinCEN, and their operators are sometimes failing to report suspicious activity.
As I mentioned, there really isn't a use case for these fast-proliferating devices. Well, there's one. When a criminal has a victim confused and manipulated, the fastest way to steal their money is to persuade them to drive to the nearest crypto ATM and feed the machines with $100 bills. I've talked to countless victims who've told me harrowing, tragic tales of crouching in the dark corner of a gas station, shoving money into one of these machines, terrified they are being watched. In fact, they aren't. Employees are told not to get involved. So victims drive away, their money stolen in the fastest way possible. The transfer is nearly instant, faster than a wire transfer, and irrevocable.
That means it's the perfect gadget for criminals like the Jalisco Cartel in Mexico to steal cash from Americans. Particularly elderly Americans, FinCEN says. According to FTC data, people aged 60 and over were more than three times as likely as younger adults to report a loss using a crypto ATM.
"These kiosks have increasingly facilitated elder fraud, especially among tech/customer support scams, government impersonation, confidence/romance scams, emergency/person-in-need scams, and lottery/sweepstakes scams," FinCEN said. And the losses are huge. "In 2024, the FBI’s IC3 received more than 10,956 complaints reporting the use of CVC kiosks, with reported victim losses of approximately $246.7 million. This represents a 99 percent increase in the number of complaints and a 31 percent increase in reported victim losses from 2023."
In other words, we have a five-alarm fire on our hands. One that's been blazing in broad daylight for at least a year and yet...every week, I continue to interview victims who crouched near a crypto ATM for days on end, stuffing bills into these machines, thinking they were doing the right thing.
Banks and kiosk operators should do much more. The current daily limits on transactions aren't low enough; victims are just instructed to drive all over town, or make daily deposits for weeks on end, so criminals can steal hundreds of thousands of dollars this way. Regulators should do more, too. If the majority of transactions flowing through a certain kiosk can be traced to fraud, the machine should be removed immediately. It's not impossible. The UK ordered all crypto ATMS shut down recently.
Tech can enhance our lives; it can also be weaponized. And when it is, we shouldn't stand idly by and act as if we are powerless to stop the pain it is causing our most vulnerable people.
On one hand, I'm in favor of keeping cash alive and crypto ATMs are one way of keeping cash alive. The stablecoin effort with the GENIUS Act is nothing more than a way to tender for the population of the world to have them buy out the Federal Reserve's position on US Treasuries and continue to finance the bankrupt Federal government. This is one of the reasons why BIS and IMF are irritated with stablecoins.
Considering that stablecoins and CBDC are all social credit score programmable money intended on killing cash, the crypto ATM is a way to get money into one crypto to be able to exchange to another for some level of privacy.
As you specify, there must be a way to keep that option available while preventing these systems from being nothing other than an extortion abuse system against elders.
Crypto in general is a rather exotic financial speculative instrument that takes a great deal of financial savvy to manage. I agree that it is inconsistent with folks who don't do online banking and are not comfortable managing the risk around those types of transactions.
I cannot help but to think that the cryptoATMs are in place intentionally approved by the powers that be in order to facilitate fraud for the favored criminal enterprises.
Since nearly every digital USD clears through the NY Federal Reserve, and given the level of tracking and oversight that Federal law enforcement does over crypto transactions, the fact that the issues you specify are going on seems to me that they are being allowed intentionally as a black budget funding mechanism.
When this scale of fraud is going on, just like in Venmo, to me that tells a story of it being intentionally allowed.
This is most assuredly part of Omniwar against Americans.