FBI Says Crypto-ATMs Emerging As a Source of Major Crypto Payment Scams

The Miami Field office of the United States Federal Bureau of Investigation (FBI) recently warned that scammers have been exploiting crypto ATMs to receive funds from defrauded victims.

The FBI revealed this information earlier this week on October 3 as a “public warning” about pig butchering scams. These scammers pose a long-lost friends or potential romantic partners and swipe money from the victims.

Initially, to win the trust of victims, the scammers show a genuine trust in them. Later, the drive the potential victims into financial and investment discussions. In a public service announcement, the FBI said that the victims of these pig-butchering crypto scams have very little to no chance of getting their funds back.

But they noted that the scammers have been increasingly directing the victims to transfer funds via crypto ATMs. The FBI noted: “Many victims report being directed to make wire transfers to overseas accounts or purchase large amounts of prepaid cards. The use of cryptocurrency and cryptocurrency ATMs is also an emerging method of payment. Individual losses related to these schemes ranged from tens of thousands to millions of dollars.”

The Federal agency also added that during the pig-butchering scam victims are “coached through an investment process” and “encouraged to make continuous deposits by the fraudsters. When the victims attempt to cash out their investments, they are told they need to pay income taxes or additional fees, causing them to lose additional funds.”

This is not the first time that scammers have been using crypto ATMs. In the past, scammers posing as public officials, law enforcement agents or employees of local utility companies, have asked the victims to send them payments under the guise of paying bills or unpaid taxes.

The U.S. is the largest market of crypto ATMs accounting for 85% of the global crypto ATM distribution. As of now, there are 33,500 cryptocurrency ATMs are functional in the United States.

Earlier this year in January, the U.S. Federal Trade Commission sent out warning regarding crypto ATM scams. The FBI urged people to “verify the validity of any investment opportunity” introduced by these types of people. They have also asked people to monitor money requests coming from domain names impersonating legitimate exchanges and misspelled URLs.