Bitcoin ATM machine, dispensing the cryptocurrency Bitcoin, in the Mission District neighborhood of San Francisco, California, January 14, 2018. (Photo by Smith Collection/Gado/Getty Images)
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A report from the Federal Trade Commission (FTC) indicates a 1,000 % increase in money lost to scammers through cryptocurrency ATMs between 2020 and 2023. Additionally, consumers reported losses of $388 million in 2025 a 58% increase in losses over 2024. Cryptocurrency ATM scams have gotten much worse since I wrote about them in Forbes last year.
Bitcoin and other cryptocurrency ATMs look just like traditional ATMs, but instead of distributing cash, they take cash in exchange for cryptocurrency and enable the transfer of the deposited cash turned into cryptocurrencies into crypto wallets. Due to the anonymity and immediacy of the cryptocurrency transfers done through a cryptocurrency ATM, it is a favorite method of payment for scammers.
While cryptocurrency ATMs were not created by criminals, criminals were quick to take advantage of these machines to provide a quick and efficient way to receive funds from victims of their scams. In particular, the anonymity of cryptocurrencies and the ease with which the funds could be transferred out of the country through a cryptocurrency ATM made cryptocurrency ATMs a favorite method for laundering the proceeds of scams. In 2024 the FTC published a report in which it referred to cryptocurrency ATMs as “a payment portal for scammers.”
HOW SCAMMERS LURE THEIR VICTIMS
Most of the scams using cryptocurrency ATMs involve imposter scams where the scammer poses either as a law enforcement officer, government official or someone providing tech support for a non-existent problem. What all of these imposter scams have in common is that they scare the targeted victim with a story about an emergency that requires them to take cash from their bank account and use a QR code provided by the scammer to deposit the money into the account of the scammer at a cryptocurrency ATM under the guise of protecting the funds or paying for a necessary service such as tech support. According to the FTC, people over 60 years old were more than three times more likely to report losing money to a cryptocurrency ATM scam with an average loss of $10,000.
Earlier this year, Massachusetts became the latest state to sue a crypto ATM operator, in this case Bitcoin Depot, for enabling criminals to use their machines to scam people. According to the lawsuit, more than half of the money that went through Bitcoin Depot ATMs between August 2023 and January 2025 was related to scams. Presently three states have issued outright bans of cryptocurrency ATMS. In March 2026 Indiana became the first state to ban cryptocurrency ATMs. Tennessee followed suit and its ban will become effective on July 1, 2026 while Minnesota’s ban goes into effect on August 1, 2026.
While not banning cryptocurrency ATMs outright South Dakota, Arizona, Colorado, Arkansas, Virginia and Wisconsin have all passed regulations with restrictions such as caps on transaction amounts and refund provisions for scam victims.
ATM FRAUD PREVENTION ACT
Regardless of these state actions, there is a great need for unified rules and federal law to protect consumers using cryptocurrency ATMs. Illinois Senator Richard Durbin filed the Crypto Fraud ATM Fraud Prevention Act in February of 2025. It has been referred to the Senate’s Committee on Banking, Housing and Urban Affairs. If enacted into law the bill would require:
- All cryptocurrency ATM operators to register with the U.S. Treasury;
- Limit transactions amount to a maximum of $2,000 per day and $10,000 over 14 days for new users;
- Mandate customer verification calls for large transactions, prominent fraud warnings and enactment of anti-fraud compliance programs;
- The use of blockchain analytics to prevent sending cryptocurrency to a cryptocurrency wallet known to be affiliated with fraudulent activity and to detect transaction patterns indicative of fraud or other illicit activities;
- Full refunds to scam victims if they report the scam within 30 days and notify law enforcement.
PROTECTING YOURSELF FROM CRYPTOCURRENCY ATM SCAMS
Protecting yourself from imposter scams starts with recognizing that you can never be sure who is actually contacting you when you are contacted by phone, email or text message so you should never click on a link, download an attachment or provide personal information in response to any of those communications unless you have absolutely confirmed that the communication was legitimate. Most importantly, there is no circumstance where you will be asked by anyone legitimate to withdraw funds from your bank, deposit them into a cryptocurrency ATM and transfer the funds to them for safekeeping or be required to pay for a legitimate service only by cryptocurrencies. Only scammers make those requests.