How cryptocurrency A.T.M.s became a powerful tool for modern scammers

Cryptocurrency A.T.M.s — once marketed as simple on-ramps for buying digital assets with cash — are increasingly at the center of sophisticated fraud schemes targeting everyday consumers across the United States. These kiosks, which often sit quietly inside supermarkets, convenience stores, and gas stations, allow users to convert physical currency into digital tokens that can be sent anywhere in the world within minutes. That convenience, law enforcement officials warn, has also opened the door to widespread abuse.

A romance scam that ended in financial ruin

For Mary Handeland, a 71-year-old real estate agent in Grafton, Wisconsin, the danger of these machines became painfully clear. After meeting a man named “Mike” on a dating app — a supposed engineer working for a defense contractor — she spent months exchanging messages and building what she believed was a genuine emotional bond.

Two months into the relationship, “Mike” professed his love. Shortly afterward, he asked for money.

Following detailed instructions, Ms. Handeland began depositing cash into cryptocurrency A.T.M.s around her community. Each deposit instantly converted the funds into digital currency, which was then routed to accounts controlled by the scammer. Over 19 separate transactions beginning last October, she sent a total of $98,300. When the money was gone, so was “Mike.”

“The way you’re manipulated, it’s almost like being pulled into a vortex,” she said.

A rapidly expanding network with growing vulnerabilities

Her story reflects a broader trend. Cryptocurrency A.T.M.s have spread rapidly over the past decade, with more than 28,000 machines now operating nationwide — a footprint larger than that of some major bank A.T.M. networks. Companies such as Bitcoin Depot, CoinFlip, Athena Bitcoin, and others market the machines as accessible tools for anyone wishing to purchase digital currencies quickly and without traditional banking hurdles.

But as the number of kiosks has grown, so has criminal interest. The F.B.I.’s Internet Crime Complaint Center recorded nearly 11,000 fraud complaints related to these machines last year, totaling $246.7 million in losses. In just the first seven months of this year, an additional $240 million in A.T.M.-related cryptocurrency fraud was estimated.

Crypto-analytics firm TRM Labs reports that cryptocurrency A.T.M.s were linked to illicit activity at a rate more than 17 times higher than the broader crypto ecosystem from 2024 through mid-2025.

Why criminals favor crypto A.T.M.s

According to financial-crime experts, the attractiveness of these machines lies in their simplicity. Victims who may not understand how cryptocurrency works can be persuaded to follow a scammer’s instructions step-by-step: go to a kiosk, insert cash, scan a QR code, and press “send.”

“For less technologically experienced victims, these machines are the easiest way for criminals to extract money,” said Aidan Larkin, chief executive of Asset Reality, a firm that works with law enforcement on digital asset recovery.

Once transferred, the funds can be routed through international exchanges and wallets, often making them nearly impossible to recover.

Regulators push back

In response to rising fraud, several states — including California and Illinois — have adopted stricter oversight measures. California, for example, enacted rules capping daily transactions at $1,000 and limiting operator fees to $5 or 15 percent of the transaction amount.

Law-enforcement groups have argued these changes are urgently needed. In a letter to lawmakers, former California Police Chiefs Association president Alexander Gammelgard warned that cryptocurrency A.T.M.s allow “international criminal organizations to steal funds … without the involvement of any bank or financial institution” that might otherwise help track the perpetrators.

Industry response: prevention efforts and pushback

A.T.M. operators emphasize that scams represent a small portion of their total activity. Bitcoin Depot, the largest operator in North America, has said fraudulent transactions make up only 2 to 3 percent of its U.S. volume and that it maintains one of the industry’s strongest compliance programs.

Other companies have implemented measures such as fraud warnings displayed on-screen, customer-attestation requirements, and proactive outreach to older users. Byte Federal, for instance, calls every new customer aged 60 or older — a practice the company says prevents more than 80 percent of attempted scam transactions.

Yet even with these safeguards, criminals persist. “As much as we try, they always seem to be one step ahead,” said Sung Choi, chief operating officer of Coinme, a company that provides A.T.M. software.

Life-Altering Consequences for Victims

Behind the statistics are victims who suffer deep financial and emotional wounds. In Texas, retired nurse Connie Ruth Morris was targeted through an online fan group for a well-known Brazilian actor. Believing she had formed a romantic relationship, she ultimately sent an estimated $300,000 through cryptocurrency A.T.M.s — along with iPhones and other gifts. The scam devastated her family finances and contributed to the end of her marriage.

“I was so brainwashed that I lost touch with reality,” she said. “Now I can’t help my family the way I always did.”

A growing challenge with no easy solution

While regulators and operators continue to tighten controls, cryptocurrency A.T.M.s remain a favored tool for scammers because they allow quick, irreversible transfers with minimal oversight. As their popularity spreads, so too does the urgency to educate potential victims and design more robust safeguards.

Original article adapted from reporting by The New York Times. Source: https://www.nytimes.com/