The sister of one of my golfing buddies received a threatening call telling her a warrant had been issued for her arrest. She panicked and followed the caller’s instructions to deposit $5,500 in a Bitcoin ATM to avoid being arrested. There was no way to recover the money once she learned it was a scam.

Others have lost even more. An elderly Minnesota man got a call telling him his bank account was about to be hacked and that he should withdraw the $25,000 balance, take the cash to a gas station, deposit it into a Bitcoin ATM, and send the money to a QR coded “digital wallet” for safekeeping.

It gets worse. A 75-year-old Ohio woman got a pop-up message on her computer saying there was fraudulent activity on her husband’s bank account and she needed to move the money immediately to prevent it from being stolen. She transferred $280,000 in multiple transactions through a Bitcoin ATM. Police were able to recover $130,000, but that rarely happens in scams.

Bitcoin ATMs look like traditional ATMs and are often located in convenience stores. Instead of distributing cash, they allow users to exchange cash for cryptocurrency. Scammers like them because it’s almost impossible for victims to recover their money. My golfing buddy thought that perhaps the store was complicit in the theft of his sister’s money, but I read about several cases where store personnel saved people from becoming victims of scams.

The FTC says fraud losses to Bitcoin ATMs topped $64 million in the first six months of 2024. Only a small percentage of scams are reported, so the actual losses are likely much higher. Consumers over the age of 60 were more than three times as likely as younger adults to lose money in a Bitcoin ATM scam. The median loss for people of all ages was $10,000.

Most Bitcoin ATM scams involve government impersonators who create a sense of urgency by saying the victim’s money is at risk or the victim has been tied to money laundering or smuggling.  The crooks convince victims to protect their money by depositing it into a Bitcoin ATM. Once the victim scans a QR code provided by the scammer at the machine, the money goes straight to the scammer’s crypto account.   

In September, seven United States Senators sent a letter to the ten largest Bitcoin ATM operators saying “We write to call on you to take immediate action to address troubling reports that your Bitcoin ATMs (BTMs) are contributing to widespread financial fraud against elderly Americans.” 

The FTC and BBB offer these tips to avoid becoming the victim of a Bitcoin ATM scam (and many other kinds of scams):

• Don’t believe anyone who says you need to use a Bitcoin ATM to protect your money or fix a problem. Real businesses and government agencies will never do that.
• Never withdraw cash in response to an unexpected call or message. 
• Verify the story. If you think there’s a real problem with one of your accounts, use a phone number, website, or app you know is real to contact your bank, investment, or retirement company. Don’t use contact information in the unexpected call or message you got. That will only take you back to the scammer.