Rising Wave of Bitcoin ATM Scams and How to Protect Yourself
In recent years, Bitcoin ATM scams have surged, leaving countless victims in their wake. According to the Federal Trade Commission (FTC), the median loss from such scams was a staggering $10,000 in the first half of 2024. With over $110 million lost to these scams in 2023 alone, understanding this growing threat is essential for anyone involved in cryptocurrency transactions.
Understanding Bitcoin ATM Scams
Bitcoin ATMs, which accept cash in exchange for cryptocurrency, have become a favourite tool for scammers. These machines resemble traditional ATMs and are often found in high-traffic areas like convenience stores and petrol stations. Scammers exploit these machines by convincing unsuspecting individuals to deposit cash under false pretences, such as protecting their savings.
Who Is Most at Risk?
The FTC data reveals that individuals over 60 are three times more likely to fall victim to Bitcoin ATM scams compared to younger adults. Grant Cardone, CEO of Cardone Capital, explains that those most at risk are “easily moved by fear of loss or hope of gain.” Scams often involve convincing targets they are at immediate risk of losing something valuable or missing out on a lucrative opportunity.
Why Scammers Love Bitcoin ATMs
Sheldon Weisfeld, a partner in Event Horizon Capital and former CEO of CoinVault ATM, highlights several reasons why Bitcoin ATMs are attractive to scammers. These machines do not require personal interaction, making it easier for scammers to operate anonymously. With 31,000 Bitcoin ATMs across the country, accessibility is another significant factor.
The Ever-Changing Landscape of Scams
One of the most daunting aspects of dealing with scams is the constantly evolving nature of these threats. Weisfeld notes that even those familiar with Bitcoin can be easily scammed due to the rapid pace of technological advancements and the ease with which scammers can gather personal information from the internet.
Tips to Avoid Bitcoin ATM Scams
The FTC provides several tips to help you protect yourself from these scams:
- Slow Down:
Scammers often create a sense of urgency. Before taking any action, talk to someone you trust and verify the situation.
- Ignore Unexpected Requests:
Be wary of calls or messages asking you to withdraw cash or make transactions using a Bitcoin ATM. Legitimate businesses and government officials will never ask you to do this.
- Verify Before Acting:
If someone claims you need to use a Bitcoin ATM or buy gift cards to protect your money, do not believe them.
Notices and Support
Bitcoin ATMs are required to display notices warning users about potential scams. Operators must also file a Suspicious Activity Report if a user calls for support and appears to be in distress. These measures are in place to help protect consumers, but vigilance is still crucial.
Given the public placement of Bitcoin ATMs, community awareness can play a vital role in preventing scams. Educated individuals can help monitor these machines and alert others who may not be as informed. Continuous education on the latest scams and how they operate is essential. Staying informed can help you recognise red flags and avoid becoming a victim.
Protecting the Vulnerable
Special attention should be given to protecting older adults, who are more likely to fall victim to these scams. Family members and caregivers can play a critical role in educating and safeguarding their loved ones.
What to Do If You’re Scammed
If you think you’ve fallen victim to a Bitcoin ATM scam, report it immediately to the FTC and your local authorities. Quick action can sometimes mitigate the damage and prevent further losses.
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