According to the FBI, last year cryptocurrency ATM fraud robbed more than 10,000 Americans, many of them older adults, of almost 400 million dollars. This scam involves cryptocurrency ATMs located in gas stations, smoke shops and convenience stores across the U.S. KSFR reporter Mary Lou Cooper interviewed former IRS special agent Brian Watson about the scams. Watson currently works with the Arizona nonprofit R.O.S.E. to educate seniors about these swindles. He teaches White Collar Crime at the University of Arizona.
Here’s a summary of that interview.
- What exactly is cryptocurrency and what are cryptocurrency ATM scams? Cryptocurrency is digital money that’s been around about 15 years. No central bank or government controls it. It works on a public shared list called Blockchain. People send funds directly to each other without banks. There are at least 8,000 cryptocurrencies that are traded. Bitcoin was the first and most famous. Crypto ATM scams happen when fraudsters convince people to withdraw cash, go to a digital currency kiosk and then deposit that money into the scammer’s crypto wallet. Because these transactions are instant, the stolen money is extremely difficult to track and retrieve. The cryptocurrency ATM machine per se is not the scam but rather the method by which the tricksters collect their victims’ money. The machine itself is not evil. It’s the people who use it in evil ways.
- To help listeners picture just how the cryptocurrency ATM scams work, Watson and Cooper roleplayed a scam (inspired by a true Arizona story) involving a phony fine for failure to show up for jury duty. Watson plays the scammer with Cooper as the victim. Watson calls up Cooper claiming he’s from the first judicial court clerk’s office in Santa Fe. He says that because she’s failed to show up for jury duty after a summons, she must either pay a refundable fine of $5000 or go to prison. Cooper asks if she could just mail the court a check. Watson says it’s too late for that. He directs Cooper to go to her bank and withdraw $5000 in cash and then deposit it into the nearest Crypto ATM machine which he “helps” her locate. He gives her what he says is a secure QR code to tell the machine where to send her money, assuring her that the code is secure and the court uses it all the time to collect fines. And just like that, the victim’s money is gone.
- Where did the victim go wrong? What were the red flags? The big red flag is that courts are not going to call you up and demand money over the phone to be paid using cryptocurrency ATMs. Victims need to hang up the phone and call the court directly at a verified number (not one provided by a scammer) or go down to the court clerk’s office and clear up the matter face-to-face.
- What are some real-life examples of cryptocurrency ATM crimes? In addition to the jury scam example, Watson talked about a scam where the victim gets a call purportedly from her bank. The caller says he’s calling because an insider at the bank is about to steal the customer’s money.The scammer instructs the customer to put the money somewhere safe.The thief asks the victim to withdraw all of her cash and put it into a cryptocurrency ATM.In one instance, Watson spoke to a lady in the Phoenix area who withdrew $200,000 in cash, put it into a scammer’s cryptocurrency ATM account and lost it all.
- Who are the perpetrators of these scams and who are the victims? Often scammers are overseas and part of organized criminal groups such as Chinese mafia or Mexican cartels. Often the callers themselves are working against their will in massive scam compounds. It’s estimated that 200,000-300,000 people are working against their will in Southeast Asia alone. The victims could be anywhere in the U.S. or the world. With technology, scammers can reach all of us. Every age group gets scammed, but the older we get the more money we lose due to an accumulation of wealth. Adults 60+take a disproportionate amount of the crypto ATM losses.
- Do any of the states or the federal government specifically regulate or ban the crypto ATM industry? It varies by state and municipality. A couple of years ago towns and cities that stood up to this fraud. But it wasn’t the best way to combat it because scammers could just go to the next neighboring town. Now the states are stepping up. In 2026 Indiana, Tennessee and Minnesota banned cryptocurrency ATMs and many other states are in the process. Hawaii allows crypto machines, but cash deposits are banned, making it more difficult for scammers to steal from their victims.
Note: The federal government places basic anti-money laundering restrictions on cryptocurrency ATMs but leaves specific transaction limits and bans to individual states. New Mexico does NOT have a dedicated cryptocurrency ATM law, but other money services regulations apply.
