Surge in Cryptocurrency ATM Fraud
In a pressing response to a surge in fraudulent activities involving cryptocurrency ATMs, U.S. authorities ramped up efforts in 2025 to address the vulnerabilities these machines pose, particularly to the elderly population. With scams linked to crypto ATMs resulting in a staggering $246 million loss last year—a 99% increase from the previous year—nearly half (43%) of these losses were reported by individuals aged 60 and older.
Common Fraud Schemes
Reports indicate that the common fraud scheme entails older victims withdrawing cash from their accounts, using it to purchase cryptocurrency from these ATMs, and subsequently transferring it to scammers impersonating government officials or technical support staff.
Some victims were lured into bizarre scams, like one reported in Massachusetts, where individuals were duped into making crypto payments for nonexistent jury duty obligations. The irreversible nature of cryptocurrency transactions complicates the recovery process for these victims, often leaving them with no recourse as scammers vanish, taking their funds with them.
Legal Complications
Legal interpretations have further complicated matters, as seen in Iowa, where two court rulings allowed a crypto ATM operator to keep funds associated with fraud due to the stipulations in their user agreements that claim ownership of the wallet receiving the transactions.
Chris Ryan, the legal officer at Bitcoin Depot, asserted that their involvement ceases once a transaction is completed—often with law enforcement creating additional issues by forcibly accessing ATMs to retrieve cash, damaging the machines in the process.
Notably, in Texas, local sheriffs used power tools to break into an ATM, claiming over $32,000 in cash, which Bitcoin Depot insisted belonged to them.
Legal Actions Against Crypto ATM Operators
Adding to the mounting pressure, Iowa Attorney General Brenna Bird has taken on prominent players like Bitcoin Depot and CoinFlip. She filed a lawsuit alleging they unlawfully profited from scam victims through high, concealed transaction fees. Similarly, Washington D.C. Attorney General Brian L. Schwalb accused Athena Bitcoin of exploiting older adults through hidden fees that could reach as high as 26%, arguing these fees were especially predatory under the pressing circumstances faced by vulnerable consumers.
Legislative Responses
In response to the alarmingly high incidence of scams, legislation has emerged aimed at curtailing cryptocurrency fraud. Illinois Senator Dick Durbin introduced the Crypto ATM Fraud Prevention Act, which would enforce strict transaction limits and mandate full refunds for fraud victims who report losses promptly. Still, the bill has stalled in Congress, failing to move forward since its introduction in a Republican-controlled Senate earlier this year.
State-Level Actions
Although federal regulation struggles to gain traction, state-level responses have been more decisive. Reports indicate that more than a dozen states have introduced or passed new laws aimed at managing crypto ATM operations, while cities like Spokane, Washington, have gone as far as to enact outright bans on these machines. Illinois also took significant steps by requiring crypto ATM operators to register with state authorities and establishing transaction caps and limits for new users.
Current Landscape of Crypto ATMs
As of mid-November, the U.S. boasted around 30,750 crypto ATMs—making up 78% of the global total—despite a nationwide stagnation in new installations since 2022. Internationally, some countries have moved to ban crypto ATMs outright, mirroring New Zealand’s recent decision to prohibit these machines as part of broader efforts to combat illicit financial activities.
