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Check out our deep dive into bitcoin ATM scams, the legal panorama, and how operators can reply.
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July 25, 2025 by Bradley Cooper — Editor, ATM Market & Meals Truck Operator
Bitcoin ATMs are at a crossroads in some ways. This is due in no small half to the enhance in scams. Bitcoin ATM scams are usually not solely costing victims some huge cash, they are additionally harming the status of operators.
How a lot cash have individuals misplaced from bitcoin ATM scams?
The information is fairly compelling as to the affect of those scams. The latest data from the Federal Trade Commission discovered that these scams led to $65 million in loses from the first half of 2024 alone. The FBI stated in a 2024 report that there have been complaints of $246.7 million in losses from cryptocurrency. In 2023, that quantity was $114 million in whole, a tenfold enhance from 2020. This does not account for the giant numbers of unreported scams.
These scams are additionally occurring worldwide, asTasmania found that the biggest bitcoin ATM users have been rip-off victims. The Australia Federal Police revealed that from Jan 1., 2024 to Jan. 1, 2025, reported losses exceeded greater than $3 million.
How do bitcoin ATM scams work?
Scammers use related ways with this rip-off as they have in the previous. They contact the sufferer by way of name, textual content or electronic mail in an try and trick the sufferer into sending them cash.
The Department of Financial Protection & Innovation of California stated they could also be, “pretending to be from a official group, a romantic curiosity, or a distant relative.”
One fashionable method is to faux to be from a monetary establishment and say the consumer’s account has had a safety problem and the buyer must withdraw funds and deposit it in a protected location, akin to a bitcoin ATM.
From there, the scammer will hold the sufferer on the telephone, directing them on how to make use of the machine and training them to disregard any potential warnings the machine provides about scams or that each one transactions are ultimate. After depositing the cash, the scammer will normally have the sufferer scan a QR code that hyperlinks to their cryptocurrency wallets.
What makes bitcoin ATM scams totally different from different scams?
The most important distinction is that it is rather more troublesome if not unimaginable for a sufferer to retrieve cash from a bitcoin ATM as soon as they have deposited it.
This is because of the nature of bitcoin itself. When a buyer purchases bitcoin, the transaction is logged onto the blockchain which can’t be modified, altered or reversed. The bitcoin ATM operator will ship the bitcoin from its wallets to the pockets recognized by the consumer: on this case, the scammer’s pockets.
In some instances, native regulation enforcement have opened up a bitcoin ATM to retrieve the money for the sufferer. This has led to important legal battles between distributors and native regulation enforcement. In 2023 McLennan County, Texas, a sheriff opened up a bitcoin ATM to return $15,000 to a sufferer of a rip-off. In the same case, in Might 21, the Linn County, Iowa Sheriff’s division eliminated $14,100 from a bitcoin ATM, in line with Iowa Appeals.com.
In each instances, the courts dominated towards regulation enforcement as the operator had no concept that the funds have been being deposited as a part of a rip-off.
How are lawmakers responding to bitcoin ATM scams?
Completely different localities, states and international locations have taken numerous approaches to the problem of bitcoin ATM scams.
On one excessive there are outright bans in some locations. For instance, Spokane Washington formally handed a ban on all crypto ATMs in June 2025, as did Stillwater, Minnesota in March 2025. The whole nation of New Zealand did the similar in July 2025.
In lots of instances, legislatures aren’t pursuing bans as a lot as ordinances and rules.
For example, Grosse Point Farms, Michigan passed an ordinance that requires crypto ATM operators to place fraud threat warnings close by and to restrict day by day purchases at bitcoin ATMs to $1,000 with a $5,000 restrict over 14 days. The city did this preemptively as there are not any bitcoin ATMs in its official borders, though there are machines in close by communities.
Nebraska places that restrict at $2,000 day by day for brand new customers, and people customers can obtain a full refund if they report the fraud inside 90 days. Iowa has put the same regulation in place, though the restrict for refunds is shorter at 30 days.
Some state legal guidelines additionally put limits on the price for bitcoin ATMs, akin to in California, which says any transaction is both $5 or 15% of the whole quantity.
On the federal stage, Sen. Dick Durbin of Illinois has called for limits to be positioned on bitcoin transactions for brand new customers and for full refunds for fraud victims.
“Nothing a lot has occurred but at the federal stage, however it is coming. At the state stage, about 2/3 of all the new and proposed ATM laws we’re monitoring entails crypto in some vogue,” David Tente, CEO of the ATM Industry Affiliation(ATMIA), stated in an electronic mail interview. “It is nonetheless comparatively new for many -which additionally signifies that the stage of understanding for many is low – and that tends to generate some concern/anxiousness.”
What can crypto ATM operators do to forestall scams?
There are a number of strategies bitcoin ATM operators can use to assist fight scams.
“Operators ought to construct in a number of layers of consumer schooling with out making the expertise overly sophisticated. That begins with clear, persistent rip-off warnings reminding prospects by no means to ship cash to somebody they do not personally know or belief, and identical to with a conventional ATM, by no means to deposit money into an account that is not your personal or trusted,” Scott Buchanan, COO of Bitcoin Depot, stated in an electronic mail interview.
One methodology can be for the bitcoin ATM to set off an alert when an excessive amount of money is inserted into the ATM directly or place day by day limits for brand new customers.
“It is also essential to offer dwell help by way of telephone, textual content, chat, and electronic mail to assist information customers by means of each step of the course of. The purpose ought to be to create guardrails that defend individuals with out slowing down official transactions. A well-designed interface can do each: discourage dangerous actors and hold the course of quick and intuitive for everybody else,” Buchanan stated.
Buchanan additionally added that operators may also help throughout bitcoin rip-off incidents by offering information.
“We regularly present regulation enforcement with priceless information primarily based on our industry-leading blockchain analytics instruments. We’re registered with FinCEN and comply with strict compliance protocols, together with ID verification, transaction monitoring, and watchlist screening. We additionally function on a non-custodial mannequin and don’t maintain consumer funds. It is our purpose to develop entry to cryptocurrency in a accountable manner whereas persevering with to strengthen protections and help for our customers.”
Tente recommends that bitcoin ATM operators be proactive and make contact with native regulation enforcement about how bitcoin ATMs work.
“Earlier than an operator even deploys their first terminal/kiosk, they ought to attain out to native regulation enforcement and educate them on how the crypto transaction course of works — together with who owns any deposited money, which may fluctuate location to location. Crypto deployers may also show our Warning poster — Six Typical Cryptocurrency Fraud Schemes. They may even make a behavior of asking each consumer — ‘Is that this your first time utilizing a cryptocurrency ATM/kiosk,'” Tente stated.
When it come to warnings on or round the machine, Tente believes shorter could also be higher.
“Some states have proposed the posting of volumes of knowledge at the ATM that get to the level of being ridiculous. Significantly if somebody is in the technique of turning into a sufferer. The widespread response is typically — scroll rapidly to the backside of the listing and click on on ‘Settle for.’ It is perhaps higher to show a number of quick warnings that persons are extra more likely to learn,” Tente stated.
Conclusion
Bitcoin ATM scams possible will not go away anytime quickly. Nevertheless, widespread sense rules that restrict transactions for brand new customers, together with security guards put in place by operators can deter scammers.
Whereas it is true that bitcoin ATM operators are usually not answerable for the actions of scammers, by putting in proactive options, they can keep away from potential PR fallout. It is additionally particularly essential that bitcoin ATM operators be proactive in working with native regulation enforcement and authorities each to tell them of the machines and of potential points.
About Bradley Cooper
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ATM Industry Association (ATMIA)
The ATM Industry Affiliation, based in 1997, is a world non-profit commerce affiliation with over 10,500 members in 65 international locations. The membership base covers the full vary of this worldwide industry comprising over 2.2 million put in ATMs.
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