The U.S. Treasury Department is warning financial institutions about the increasing use of cryptocurrency ATMs for scams and money laundering.
Why it matters: Criminals are exploiting the rapid growth of crypto ATMs and weak compliance with anti-money laundering rules to steal money from victims and launder funds.
The details:
- Crypto ATMs, also known as convertible virtual currency kiosks, allow customers to buy cryptocurrency with cash.
- The number of Bitcoin ATMs in the U.S. has surged from 4,250 at the start of 2020 to 30,647 as of August 4.
- Last year, the FBI received nearly 11,000 complaints related to these kiosks, with victim losses of about $246.7 million from scams.
- Many ATM operators are failing to register with FinCEN as money services businesses, a legal requirement under the Bank Secrecy Act.
Criminals particularly seek out kiosks with weak controls and often use them in tech and customer support scams targeting senior citizens.
What they’re saying:
- “CVC kiosks operated by non-compliant operators are especially vulnerable to abuse by scammers and other criminals,” the Treasury Department stated.
- FinCEN advised ATM operators to be aware of red flags, such as customers making multiple payments just below the suspicious activity reporting threshold from different kiosks.
The other side: Crypto ATMs serve a legitimate purpose, but the general unfamiliarity about how they work is being exploited by scammers.
What’s next: The warnings align with broader calls for increased oversight of crypto ATMs, with proposed legislation in the U.S. and new regulations being introduced in other countries like Australia.
