According to CoinDesk, law enforcement authorities worldwide are increasingly concerned about the use of crypto ATMs in scams, as highlighted in a report by blockchain analytics firm TRM Labs. The report reveals that over $30 million was funneled to known scam addresses through cash-to-crypto services last year alone. Since 2019, the cash-to-crypto industry, primarily driven by crypto ATMs, has processed at least $160 million in illicit transactions.

The report, released on Wednesday, underscores the growing apprehension among global law enforcement regarding the proliferation of crypto ATMs, which convert fiat currency into cryptocurrency and send it to designated digital wallets. In 2023, a significant 79% of all illicit cash-to-crypto transfers, amounting to over $30 million, were directed to known scam addresses via these services.

Crypto ATMs came under scrutiny earlier this month when Germany's financial regulator, BaFin, seized 13 machines in a raid, confiscating nearly 250,000 euros ($280,000) in cash. This incident is part of a broader trend, with the report citing similar actions in 2023, including the shutdown of 26 bitcoin ATMs in the U.K. and the seizure of 18 machines in Texas and over 50 Bitcoin of America ATMs in Ohio by U.S. authorities.

The report highlights that crypto ATMs are particularly vulnerable to money laundering due to their use of cash and the lack of face-to-face communication or account opening controls. Among the 15,000 complaints last year involving $1 billion in losses from digital asset scams affecting individuals aged 60 and above, approximately 2,000, or 13%, involved bitcoin ATMs.

Regulatory actions in the U.S. have led to the shutdown of over 1,000 machines since May, although the country still hosts more than 31,000 crypto ATMs, the highest number globally. Meanwhile, Australia has seen a 17-fold increase in the number of machines over the past two years, potentially making it the third-largest market for crypto ATMs. Australian authorities have also identified these kiosks as a money laundering vulnerability, according to the report.