US authorities warn of crypto ATM scam, suggest stricter regulations

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US authorities warn of crypto ATM scam, suggest stricter regulations For Hannah perez

An agency working with the US Congress warned of the increase in the use of cryptocurrency ATMs in criminal activities and suggested greater regulation.


The United States government is keeping a close eye on digital currency automated teller machines (ATMs) due to a recent surge in illicit activities related to such devices. Two government agencies recently released separate reports that shed light on the status of ATMs in Bitcoin at the national level.

FTC alerts on ATM scam

The United States Federal Trade Commission (FTC) issued an alert on Monday about a new form of cryptocurrency scam that takes advantage of ATMs (also called kiosks).

The authority detailed that the scammers pose as government officials, law enforcement officers or employees of public companies to request money. The scam includes several components, including an impersonator, a QR code, and a cryptocurrency ATM. Imposters can also take advantage of dating apps to pretend to be potential romantic partners or deceive victims by announcing a supposed prize.

If the victim falls, the scammers ask them to withdraw cash and go to a cryptocurrency teller. Then they tell you to buy digital currencies at the ATM and send a QR to the victim to transfer the funds in crypto to the attackers.

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“You should know that no one from the government, law enforcement, utility or prize promoter will tell you to pay them with crypto. If someone does it, it’s a scam, always“Noted the FTC in the release.

Increase in use of crypto ATM in criminal activities

The Government Accountability Office (GAO), an agency that provides audit and investigative services to the U.S. Congress, also released a report detailing the use of ATMs for criminal operations. According to the document, cited by CoinDesk, the use of digital currencies to facilitate crimes such as human trafficking, drug trafficking and money laundering have increased, in part due to cryptocurrency ATMs.

As market use expands [cripto], FBI officials said they expect to see an increase in the use of virtual currency kiosks (ATMs) for illicit purposes, including human and drug trafficking.“Says the report.

The GAO noted that drug cartels and transactional criminal organizations are increasingly using digital currencies due to their anonymity. Specifically, the agency indicated that ATMs have become popular for money laundering because they offer more and better anonymity features.

Money messengers deposit large volumes of cash from illegal drug proceeds at a kiosk to convert the value into virtual currency”Says the report. Once illicit earnings are in this form, the funds can easily be transferred to another virtual currency user’s wallet, reducing the risk associated with transporting bulk currency.“.

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The report adds that the use of cryptocurrencies and ATMs for the payment of sex trafficking and online sex markets has also seen a recent increase, a phenomenon that it attributed to the difficulties of payment with debit and credit cards.

Government agency suggests stricter regulation

The government agency also considered the challenges authorities face in combating cryptocurrency crimes. According to the report, the general lack of information, especially about cryptocurrency ATMs, would be a factor that would be interfering with the ability of law enforcement agencies to identify and arrest criminals.

The GAO also pointed to the lack of stronger regulatory requirements for these devices. A specific problem that the agency threw up is the fact that crypto ATM operators, who must register with the Financial Crimes Enforcement Network (FinCEN), do not have to regularly update any law enforcement agency on the location of their ATMs.

That “limits the ability of federal agencies to identify kiosks in areas that have been designated as high risk for financial crime”, Highlighted the report in this regard.

In response, the agency suggested that the Tax Service (IRS) and FinCEN work together and tighten regulation of ATMs. GAO believes that by applying stricter regulations, law enforcement agencies will be able to obtain improved information and better identify the “potentially illicit transactions“. According to the report, the IRS and FinCEN agreed with the recommendations.

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The GAO’s findings are in line with a recent report released by the crypto research firm. Chainalysis, which revealed that cryptocurrency crimes increased in volume during 2021. However, while that study suggests that the use of digital assets in crime has increased, it is much lower than the number of crypto transactions not related to criminal activities.

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Sources: CoinDesk, Cointelegraph, archive

Article versioned by Hannah Estefanía Pérez / Daily bitcoin

Unsplash image edited in Canva

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