The US Treasury Department has issued a warning to financial institutions about the growing threat of scams related to cryptocurrency ATMs (ATMs). The machines, which allow customers to buy cryptocurrency in exchange for cash, have seen a massive increase in number over the past few years. However, this surge in adoption has also led to a spike in non-compliance with anti-money laundering rules.
According to data from Coin ATM Radar, there are now 30,647 reported Bitcoin ATMs in the US, up from just 4,250 at the start of 2020. The FBI’s internet crime complaint center received nearly 11,000 complaints related to these machines last year alone, with victim losses totaling around $246.7 million.
Many ATM operators fail to register with the Financial Crimes Enforcement Network (FinCEN) as required by law, leaving them vulnerable to abuse by scammers. These scammers often target senior citizens, who are given detailed instructions on how to use the machines and deposit their cryptocurrency.
Financial institutions should be aware of red flags such as customers sending multiple payments just below the suspicious activity reporting threshold from different ATMs or customers with no transaction history making substantial deposits. They should also monitor for customers taking out large amounts of money intended for a crypto ATM or conducting significant transactions at a kiosk.
This warning comes ahead of calls to increase oversight of crypto ATMs, including proposed legislation in the US that would require operators to register and disclose their locations. New Zealand has banned all crypto ATMs, while Australia has introduced new regulations on operators to address fraud concerns.
Source: https://therecord.media/crypto-atms-fueling-cybercrime