Fraud losses from Bitcoin ATMs rose to $65 million in H1 2024, affecting the elderly.
A coalition of U.S. Senate Democrats, led by Majority Whip Dick Durbin, is urging major Crypto ATM operators to take immediate action to address growing fraud among elderly Americans. On September 12, seven Democratic senators, including Elizabeth Warren, released a joint statement requesting action from the ten major cryptocurrency ATM providers.
The Federal Trade Commission (FTC) reports that fraud involving Bitcoin ATMs (BTMs) exceeded $65 million in the first half of 2023. Senators expressed profound concern about the disproportionate impact on people over the age of 60, who are more than three times as likely to fall victim to BTM-related scams than younger folks.
The letter, addressed to the CEOs of Bitcoin Depot, CoinFlip, RockItCoin, Bitstop, Coinhub, Unbank, Athena Bitcoin, Byte Federal, Cash2Bitcoin, and Margo, emphasizes the companies' role in deploying ATMs in various locations, often enticing businesses to host them. This extensive deployment has resulted in a rise in frauds targeting the elderly.
The senators cited worrisome allegations, including a July piece from the Illinois Times about a business owner who removed a Coinhub ATM after realizing that many consumers were fraud victims. They also highlighted a New York Times article outlining how scammers used cryptocurrency ATMs to persuade older folks into transferring payments.
Senators have directed firms to respond by October 4 with specifics on the fraud-prevention measures they are implementing, such as scam warnings, transaction limitations, and fraud insurance for depositors.
The FTC reports a tenfold increase in cryptocurrency ATM fraud since 2020, from $12 million to $144 million.In addition, the FBI reported a $5.6 billion loss from Bitcoin fraud in 2023, representing a 45% increase over the previous year. As the number of crypto ATMs increases, the United States leads with over 32,000 machines, followed by Canada with around 3,000 and Australia with nearly 1,200.
The spike in fraud, combined with the growing popularity of cryptocurrency ATMs, highlights the critical need for stronger security measures to protect vulnerable populations.