The Federal Trade Commission (FTC) has reported a 10-fold rise in scams involving Bitcoin ATMs since 2020, citing scams driven by fraudsters exploiting anonymity and the speed of cryptocurrency transactions.
These scams often involve malicious actors convincing victims to unwittingly transfer their funds via Bitcoin (BTC) ATMs under false pretenses.
According to FTC data, losses from Bitcoin ATM scams exceeded $110 million in 2023, with consumers aged 60 and older being three times more likely to fall victim.
In an interview with Cointelegraph, a Bitcoin Depot spokesperson responded to the FTC warning to discuss consumer protection and scam prevention.
Source: FTC
Bitcoin ATM scams
The FTC warned consumers that no legitimate agency or company will ever demand payment in BTC or other cryptocurrencies via a Bitcoin ATM.
“...neither Bitcoin nor the ATM will protect your money. In fact, no cryptocurrency will. No matter what the caller says, there’s no such thing as a government Bitcoin account or digital wallet. There are no Bitcoin federal safety lockers.“
The Bitcoin Depot spokesperson informed Cointelegraph that the firm “post scam warnings” on its kiosks and “have screen prompts that warn customers of scam potentials.”
“This is a common practice for any legitimate kiosk operator."
Related: California county to regulate Bitcoin ATMs backed by state laws
Consumer protection
The spokesperson offered several security tips for consumers to stay safe while using Bitcoin ATMs, including never sending BTC or other cryptocurrencies “to unknown digital wallets or individuals they don’t personally know and trust.”
“We routinely cooperate with regulators and law enforcement to support our customers [...] While Bitcoin ATMs are a valuable tool for accessing digital currencies, like any financial service, they can be misused by bad actors.”
The FTC and Bitcoin Depot encourage consumers to take extra precautions, be aware of potential scams, and always verify their transactions’ legitimacy before sending cryptocurrencies.
California push for regulated Bitcoin ATMs
On Aug. 7, a local government committee in Chico, California, discussed the regulation of Bitcoin ATMs.
Andy Pickett, chief administrative officer at the County of Butte, discussed the efforts to regulate Bitcoin ATMs in the government committee, aiming to treat them “more like a bank.”
Pickett explained that each jurisdiction would have to “pass their own ordinance” to regulate Bitcoin ATMs and that “any ordinance would likely be challenged in court.”
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