Consumer Protection Tuesday: How to Detect and Reject Bitcoin ATM Scams

This post is part of a weekly Tuesday series at Coinbase about the latest consumer protection and security measures for crypto owners.

At Coinbase, we’re on a mission to help update the financial system to make it safer and more secure. While only 0.34% of blockchain transactions are used for illicit activity, and cash remains the preferred medium for illegal transactions, crypto security is always a top priority. Coinbase maintains a robust compliance program, which includes Know Your Customer (KYC) checks, sanctions screenings, suspicious activity reporting, and strong law enforcement partnerships to detect and prevent illicit activity on our platform.

Stay Safe When Using BTMs By Spotting These Flags

Bitcoin ATMs (known as BTMs) can be a major convenience for crypto owners on the go.

They can also be a feeding ground for scammers. Consumers reported $114 million in combined losses from scams involving BTMs last year—an increase of nearly 900% from 2020. 

Most BTMs are run by third-party operators, so it’s important to stay alert when using one to deposit cash and buy or transfer Bitcoin. 

In many cases, scammers pretend to be government agents, tech support reps, or bank workers. They will typically reach out by phone or text and tell you that one or more of your accounts have been hacked or linked to criminal activity such as drug smuggling. The thieves will urge you to withdraw cash and direct you to a nearby BTM to send funds to a “safety locker” account.

They will then forward a QR code to scan at the kiosk, which sends the money directly to the scammers’ crypto wallet.

Spot these flags to avoid getting caught up in a BTM scam. 

1. Fake Federal Agents

Red Flags: These scammers pretend to work for government agencies such as the Social Security Administration, the IRS, or even the FTC. They will call or text you with an urgent message about one or more of your accounts being breached and tell you to act quickly. 

Always remember: Scammers want to rush you. They will apply pressure and push for your funds to be sent to a “safe account” which is anything but.

Take Caution: Pause and breath. U.S. government agents will never tell you where to send or store your money. Only scammers will do that. Never withdraw or deposit cash in response to a sudden call or message. Talk to someone you trust before doing anything else. 

2. Tech Supports Cons

Red Flags: These perpetrators will reach out claiming to be support reps for major tech companies like Apple or Google. The scammers may tell you that hackers got into one or more of your accounts and accessed your personal financial information. They will then try to convince you to relocate your funds using a BTM.

Take Caution: Do not respond to unexpected calls or text messages and double check the address of unexpected emails. If you think a warning might be real, look up the company’s website and phone number and contact its support team directly. 

3. Bogus Bank Workers

Red Flags: You might get an unexpected call from someone saying they work for your bank. The person tells you that there was flagged account activity tied to money laundering. The thieves will ultimately try to convince you that your money will be safer in a new Bitcoin account.

Take Caution: If anyone tells you that you need to use a BTM to protect your assets or resolve a problem it is a con. Just like government agents, no banker will tell you to withdraw or deposit funds at a BTM. Anyone who does is a scammer.