Lawmakers Call on Crypto ATM Operators to Combat Fraud as Losses Mount to $65M

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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September 16, 2024

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A group of U.S. Senate Democrats, led by Majority Whip and Senate Judiciary Committee Chair Dick Durbin, is urging major cryptocurrency ATM operators to take swift action against rising fraud targeting elderly Americans.

On September 12, seven Democratic senators, including Elizabeth Warren, issued a statement calling on 10 of the country’s largest crypto ATM firms to address growing financial losses from Bitcoin ATMs (BTMs).

According to data from the Federal Trade Commission (FTC), fraud linked to these machines reached $65 million in the first half of 2023.

Older Americans More Likely to Fall Victim to ATM Scams

The senators expressed particular concern for older Americans, noting that individuals aged 60 and over are more than three times as likely to fall victim to BTM-related scams than younger adults.

The letters were sent to the CEOs and top executives of Bitcoin Depot, CoinFlip, RockItCoin, Bitstop, Coinhub, Unbank, Athena Bitcoin, Byte Federal, Cash2Bitcoin, and Margo.

Durbin, Warren, and fellow senators Richard Blumenthal, Jack Reed, Tina Smith, Peter Welch, and Sheldon Whitehouse, urged the firms to “take immediate action” to curb fraud schemes that are disproportionately affecting seniors.

They highlighted the role these companies have played by placing BTMs in various locations, often paying businesses to host the machines.

According to the lawmakers, this has led to an increase in scams involving elderly Americans.

Citing a July report by the Illinois Times, the senators pointed to a business owner who removed a Coinhub ATM after realizing that most users were victims of scams.

They also referenced a New York Times article detailing multiple cases of scammers coercing older adults into transferring funds through crypto ATMs.

The senators requested that the companies respond by October 4, detailing what measures they are taking to prevent fraud.

Among the key questions asked were whether the firms provide scam warnings, impose transaction and deposit limits, and offer fraud insurance for depositors.

Crypto ATM Fraud Surges 10x Since 2020

The FTC noted that crypto ATM fraud has surged tenfold since 2020, jumping from $12 million to $144 million.

The FBI also reported that $5.6 billion was lost to crypto fraud in 2023, a 45% increase from the previous year.

As reported, scammers are increasingly incorporating crypto ATMs and kiosks into their fraudulent schemes, exploiting these digital currency exchange points to swindle unsuspecting victims.

The surge in crypto ATM fraud comes amid the growing popularity of these machines.

Just recently, it was revealed that the number of crypto ATMs in Australia has soared from a mere 73 to nearly 1,200 in two years.

Meanwhile, the United States remains the largest market with approximately 32,000 machines. Canada follows with about 3,000.