By [News Desk]
Cryptocurrency ATM operators are still expanding and raising money even as regulators intensify efforts to curb scam-driven losses linked to the machines, according to reporting from the International Consortium of Investigative Journalists and related enforcement data.[1][3]
Bitcoin Depot, once the world’s largest operator of cryptocurrency ATMs, filed for bankruptcy after regulators stepped up scrutiny of cash-to-crypto kiosks, which authorities say have been heavily used in fraud schemes.[1] The filing underscores a growing contradiction in the sector: public officials are tightening rules because of widespread scams, while some of the industry’s biggest players continue to profit from transaction volume.[1][2]
Bitcoin ATMs, also known as crypto kiosks, allow users to convert cash into digital currency. But law enforcement and consumer protection agencies say scammers increasingly direct victims to these machines to move money quickly into wallets they control.[3][7] The Federal Trade Commission said fraud losses tied to these kiosks rose nearly tenfold from 2020 to 2023 and topped $65 million in the first half of 2024 alone.[3]
The FTC described a common scheme in which fraudsters instruct victims to withdraw cash from their bank accounts and deposit it into a Bitcoin ATM after scanning a QR code sent by the scammer.[3] Consumer regulators in California also warn that scammers often pose as bank staff, government agencies, tech support representatives, romantic interests or relatives in distress to pressure victims into using the machines.[7]
State and federal officials have responded with bans, limits and licensing requirements. Indiana became the first U.S. state to ban crypto kiosks statewide in 2026, while other states have adopted transaction caps, warning signs and registration rules.[6] Connecticut suspended Bitcoin Depot’s business license, and states including Minnesota and Tennessee have also moved to ban the machines.[2]
Industry defenders argue that Bitcoin ATMs serve a legitimate function by providing a cash-to-crypto bridge for consumers who want access to digital assets.[2] But critics say the business model has increasingly depended on a customer base that scammers can easily exploit, especially older adults who are disproportionately represented among victims.[6][7]
The scale of the losses has sharpened concern among lawmakers and consumer advocates. AARP cited FBI data showing that cryptocurrency kiosks were used in scams that led to more than $389 million in reported losses in 2025, with adults 60 and older accounting for 86% of losses in cases where the victim’s age was known.[6]
Australia has also moved against the sector. The country’s financial crimes regulator, AUSTRAC, has taken action against crypto ATM operators and imposed tighter restrictions after identifying the machines as a serious laundering and scam risk.[4] The regulator has said it is using new powers to scrutinize the sector more aggressively, though it has so far stopped short of an outright ban.[4]
The regulatory pressure is reshaping the industry but has not eliminated demand. Some operators continue to install machines in convenience stores, gas stations and other everyday locations, where victims may encounter them during a scam attempt or while rushing to follow instructions from a fraudster.[7] Consumer advocates say that, in practice, the machines can convert a phone scam into an irreversible cash transfer within minutes.[3][7]
For consumers, officials say the warning signs are clear: unexpected calls or messages claiming an urgent financial problem, demands to withdraw cash, and instructions to use a crypto ATM to “protect” money.[3][7] Authorities emphasize that legitimate banks, businesses and government agencies do not ask people to deposit cash into a Bitcoin ATM to resolve an account problem or secure funds.[3][7]
The broader question now facing regulators is whether tighter controls can contain abuse without fully shutting down the business. The ICIJ reporting suggests that even as enforcement intensifies, some crypto giants remain committed to the model, betting that demand for easy cash-to-crypto access will outlast the scandal.[1]