12/16/2024 | Press release | Distributed by Public on 12/16/2024 15:40
Denver - December 16, 2024 - Bitcoin ATMs are playing a bigger role in Bitcoin scams than ever before, according to the Colorado Division of Securities. Data from the Federal Trade Commission shows consumers reporting over $110 million in losses to scams involving Bitcoin ATM machines in 2023, a tenfold increase since 2020.
A Bitcoin ATM (also known by a number of other names, including Crypto ATM) is an electronic kiosk designed to facilitate buying cryptocurrencies using any financial transaction card, including a cash or a debit card. These machines look like traditional ATMs and are located in all the same kinds of places: gas stations, convenience stores, malls and other high-traffic areas.
How do they work? You can deposit money into the ATM and the ATM charges a fee and transfers the money into cryptocurrency and puts it into an electronic wallet. You provide the address of the wallet.
While these machines provide convenient access to digital currencies, legitimate Bitcoin ATMs are increasingly being used as key players in crypto or Bitcoin scams.
The scams start through chats, social media, emails, texts, pop ups and phone calls from strangers. The lies told by scammers vary, but they create some urgent justification for consumers to take cash out of their bank accounts and put it into a Bitcoin ATM. Often, the scammers fabricate an investment that promises great returns with limited risk. When the consumers put their money into the Bitcoin ATM, the ATM converts the money to cryptocurrency.
The consumer types in the scammer's electronic wallet address, or the consumer is given a QR code to scan which points to the scammer's electronic wallet address. The Bitcoin ATM then transfers the crypto to the scammer's electronic wallet. Once in their control the scammers quickly move the crypto, making it very difficult to trace and recover.
The Colorado Division of Securities recommends investors take these proactive measures:
Never withdraw cash to put into a Bitcoin ATM in response to an unexpected call or message initiated by a stranger. Only scammers will tell you to do that.
Don't believe anyone who says you need to use a Bitcoin ATM to protect your money or to fix a problem or to get in a great investment. Real businesses and government agencies will never do that - and anyone who asks is a scammer.
Be cautious if someone tells you an investment is a secret. Legitimate businesses and advisers would not say this. It is a big red flag because it isolates you from reliable friends, family and advisers.
If you've been involved in an investment scam, contact the Colorado Division of Securities at [email protected] or 303-894-2320.
For additional tips and resources, visit the Colorado Division of Securities website.
DORA is the state's umbrella regulatory agency, charged with managing licensing and registration for multiple professions and businesses, implementing balanced regulation for Colorado industries and protecting consumers. Our nearly 600 employees are dedicated to preserving the integrity of the marketplace and promoting a fair and competitive business environment throughout Colorado.
The Division of Securities exists to protect investors and maintain confidence in the securities market, while avoiding unreasonable burdens on the marketplace by licensing securities professionals, enforcing securities law violations and helping Coloradans become more informed investors. Visit securities.colorado.gov to learn more.