Beware of crypto ATM scams, Florida Department of Law Enforcement, AARP Florida warn

Thinking of getting into the increasingly popular cryptocurrency craze? Be especially careful when using crypto ATMs, the Florida Department of Law Enforcement (FDLE) and AARP Florida warn.

Crypto ATMs, known commonly as bitcoin ATMs, or BTMs, are becoming more common across the country and in Florida. They enable users to buy and sell cryptocurrencies like bitcoin using cash or debit cards.

But there’s been a rise in fraud cases involving the machines, particularly against seniors, prompting federal and state lawmakers to file legislation to better regulate them. The Federal Trade Commission reported more than $65 million in fraud losses at BTMs in the first half of 2024, 540% more than in all of 2020.

Until more stringent regulations are passed in the Sunshine State, residents need to be aware of the dangers of using BTMs, said Mike Duffey, FDLE Cyber and Technology Bureau Special Agent in Charge.

“Crypto ATMs are often used in online crypto scams, and victims can lose thousands of dollars thinking their deposits are safe,” Duffey said in a statement.

“Usually located inside convenience stores, these ATMs take cash deposits which are converted into cryptocurrency. Criminals can exploit these crypto ATMs and redirect a citizen’s deposits to the criminal’s own account, where the digital currency is often unrecoverable.”

Duffey cautioned Floridians to be especially cautious when dealing with people they just met online.

“(Ask) yourself this question: Why do the monies have to be sent in the form of cryptocurrency?” he said. “(Take) the time to validate information on the individual you’re talking with, and, before you deposit any monies into a crypto ATM, please discuss the situation with your family and friends or reach out to your local law enforcement for advice.”

In a joint news release with FLDE, AARP Florida offered three safety tips:

— Government agencies, like law enforcement, will never ask for payments in crypto.

— Avoid using QR codes shared via text or email while using BTMs.

— BTMs are not a safe way to “protect” money from being stolen or seized.

Concern about BTM scams have mounted in recent years.

On Tuesday, Democratic U.S. Sen. Dick Durbin of Illinois announced he was filing the Crypto ATM Fraud Prevention Act. The measure would prevent new users from spending more than $2,000 in a day or $10,000 in a two-week period at the kiosks. It would also compel companies to speak directly with new customers who want to make transactions over $500 and require them to provide full refunds to users who file police reports and inform the companies of suspected fraud within 30 days of a transaction.

State lawmakers have filed legislation to address the issue too. One such bill in Arizona, sponsored by Republican state Reps. David Marshall and Michael Way, would limit how much money users can put into BTMs and require operators to be more transparent about the fees they charge.

Attorneys General have also sounded the alarm. An investigation that Iowa Attorney General Brenna Bird’s Office commenced in late 2023 found that more than 96% of the money Iowans reportedly sent through two BTM operators, Bitcoin Depot and CoinFlip — the latter of which holds a large share of the BTM market in Florida — were scam transactions.

An overwhelming share of the scams targeted people 60 and older, Bird’s Office said.

On Wednesday, Bird announced lawsuits against both BTM companies, which she accused of fleecing Iowans for millions of dollars.

“Con artists are evil and will stop at nothing to steal everything you have,” Bird said in a statement. “We already know that they target older Iowans, but now it seems that they even hunt through obituaries to target widows. They convince these older women that they need help, and then send their victims to crypto ATMs. And the crypto ATM companies take a cut of the profits. It’s not just wrong, it’s illegal.”