How Fraudsters Exploit Cryptocurrency ATMs to Target Vulnerable Victims
As cryptocurrency ATMs become increasingly common across the United States, fraudsters are finding new ways to exploit these machines to scam unsuspecting victims—especially elderly Americans. Recent reports and government warnings highlight a disturbing trend: criminals are using crypto ATMs to facilitate financial fraud, often targeting older adults who may be less familiar with digital currencies.
The Rise of Crypto ATM Scams
Cryptocurrency ATMs, also known as Bitcoin ATMs (BTMs), allow users to deposit cash and instantly convert it into digital currency, which can then be transferred to any crypto wallet. While these machines offer convenience for legitimate users, their anonymity and the irreversible nature of crypto transactions make them a favorite tool for scammers.
According to the Federal Trade Commission (FTC), losses from crypto ATM scams have skyrocketed in recent years. Between 2020 and 2023, reported losses jumped from $12 million to $114 million. In just the first half of 2025, victims lost an additional $65 million. The majority of these losses are attributed to elderly Americans, who are more than three times as likely to fall victim to these scams compared to younger adults.
How the Scams Work
Typically, fraudsters initiate contact with victims through phone calls, text messages, or online platforms, posing as representatives from banks, government agencies, or tech support. They convince victims that they need to pay a fee or resolve an urgent issue using cryptocurrency, often directing them to a nearby crypto ATM.
Once at the machine, victims deposit cash, which is instantly converted into digital currency and sent to the scammer’s wallet. Because crypto transactions are irreversible, the money is nearly impossible to recover once sent. Many victims don’t realize they’ve been scammed until it’s too late.
Real-World Impact
Incidents have been reported in cities and towns across the country. In Springfield, Illinois, a small business owner noticed that elderly customers were repeatedly depositing large sums of money at a Coinhub BTM at the urging of fraudsters. Similar stories have emerged in Texas, California, and other states, underscoring the nationwide scope of the problem.
“These are not isolated incidents,” said Amy Nofziger, Director of Fraud Victim Support for AARP. “We’re seeing record numbers of victims, and the fraudsters are often part of transnational criminal groups, not just individuals working alone.”
Government and Industry Response
Recognizing the growing threat, a group of seven Senate Democrats, led by Senator Dick Durbin, recently sent letters to the ten largest Bitcoin ATM operators urging them to take immediate action to curb fraud. The senators cited the FBI’s public service announcements and FTC data, emphasizing the need for stronger consumer protections.
“Cryptocurrencies have long been associated with criminal activity,” the senators wrote. “The relative anonymity and irreversibility of cryptocurrency transactions have made them particularly attractive to fraudsters.”
The senators called for measures such as limiting the amount of money that can be transferred at a time, improving fraud detection systems, and providing clearer warnings to users about the risks of scams.
What Consumers Can Do
Experts advise consumers to be cautious when approached by anyone asking for payment in cryptocurrency, especially if the request is unsolicited. Legitimate organizations will never demand payment via crypto ATMs. If in doubt, individuals should contact their bank or a trusted family member before proceeding.
Many crypto ATM operators have begun posting warning signs at their machines, alerting users to the risk of scams. However, advocates say more needs to be done to protect vulnerable populations, including stricter regulations and better consumer education.
Looking Ahead
As the use of cryptocurrency continues to grow, so too does the risk of fraud. Lawmakers, regulators, and industry leaders are working to find solutions, but for now, vigilance remains the best defense against these increasingly sophisticated scams.
“We believe these machines need regulations and strong consumer protections to protect victims of fraud,” said Nofziger. “Until then, it’s up to all of us to stay informed and look out for one another.”