Key Takeaways
- The senators talked about how scammers exploit the relative anonymity and irreversibility of crypto transactions to defraud seniors.
- As per data cited by lawmakers, elderly individuals are more than three times as likely to report losses through BTMs compared to younger adults.
Seven Senate Democrats have urged the top 10 bitcoin ATM operators in the U.S. to address the rising tide of crypto fraud targeting elderly Americans. On September 11, the lawmakers sent letters to CEOs of major bitcoin ATM companies, including Bitcoin Depot and CoinFlip, requesting immediate action to curb the growing number of scams.
In the letters, the senators highlighted how scammers exploit the relative anonymity and irreversibility of cryptocurrency transactions to defraud seniors. They pointed to data from the Federal Trade Commission (FTC), which reported $65 million in scam-related losses involving bitcoin ATMs in just the first half of 2023.
The senators expressed concern over the rise of bitcoin ATMs (BTMs) in businesses across the country, noting that some operators even pay businesses to host the machines. This widespread placement has, they argued, led to an increase in scams specifically affecting older adults. According to data cited by the lawmakers, elderly individuals are more than three times as likely to report losses through BTMs compared to younger adults.
Between 2020 and 2023, losses from BTM scams jumped from $12 million to $114 million. In addition, the FBI reported a total of $5.6 billion in losses due to crypto fraud in 2023, marking a 45% increase from the previous year. The average loss per BTM scam in 2023 was around $10,000, with seniors most frequently targeted.
The senators’ letter questioned the operators about the steps they are taking to protect consumers, including whether transaction limits are in place, if users are warned about potential fraud, and whether the companies provide insurance for scam victims.
The request comes amid growing concern from regulatory bodies and law enforcement agencies over the increase in crypto ATM scams. The FTC noted a tenfold increase in scams from 2020 to 2021 alone, with seniors bearing the brunt of these fraudulent schemes.
The senators have requested that BTM companies provide answers to their questions by October 4, urging the firms to act quickly to protect vulnerable consumers from further losses.
FCI in one of its reports have stated illicit cash is often put into an ATM in return for digital assets, which are then spun through several transactions until their origins become impossible to trace. Around 669 ATMS were shut down in the US between July and August 2024 timeframe, mainly owing to their involvement in crypto extortion and scams.
Last year, Bitcoin of America agreed to shut down operations in the US state of Connecticut after the state’s Department of Banking charged the company with operating money transmitter services without a license.
Bitcoin ATMs are banned in some countries, like the U.K. and Singapore. As per blockchain intelligence firm TRM labs, crypto kiosks/ATMs dominate the cash-to-crypto industry, which has processed a staggering $160 million in illicit volumes around the world since 2019.
