Scam Alert: Crypto ATMs Exploit Users

Bitcoins and Bitcoin themed banknotes in various designs

Virtual currency kiosks are increasingly becoming tools for scams, targeting vulnerable populations, especially older adults.

Story Highlights

FinCEN issues a notice warning about the misuse of cryptocurrency kiosks.
Scammers exploit these kiosks for fraud and money laundering.
Vulnerable populations, particularly older adults, are frequently targeted.
Financial institutions urged to enhance monitoring and compliance.

FinCEN Warns About Cryptocurrency Kiosk Scams

On August 4, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) released a notice highlighting the increasing misuse of convertible virtual currency (CVC) kiosks, commonly known as cryptocurrency ATMs. The notice emphasizes the surge in scams, particularly targeting older adults, and calls for financial institutions to be vigilant. FinCEN’s notice also outlines red flag indicators to help detect suspicious activities involving these kiosks. The notice comes in response to a significant rise in fraud and money laundering facilitated through these machines.

Convertible virtual currency kiosks have gained popularity as a convenient way to buy and sell cryptocurrencies using cash or fiat currency. However, their rapid adoption has outpaced regulatory oversight, making them attractive to criminals. The anonymity and accessibility of these kiosks create an environment ripe for exploitation. In 2019, FinCEN had already warned about the risks associated with CVC kiosks. The situation has worsened, with the FBI’s Internet Crime Complaint Center (IC3) receiving over 10,956 complaints related to these kiosks in 2024 alone.

Regulatory and Compliance Challenges

FinCEN’s notice serves as a reminder of the regulatory obligations under the Bank Secrecy Act (BSA) for kiosk operators. These businesses must implement anti-money laundering (AML) controls to prevent misuse. However, the notice indicates that many operators may not be fully compliant, leading to increased scrutiny from law enforcement and financial regulators. The need for enhanced monitoring by financial institutions is critical, as they play a vital role in detecting and reporting suspicious transactions. FinCEN Director Andrea Gacki stated, “Criminals are relentless in their efforts to steal money from victims, and they’ve learned to exploit innovative technologies like CVC kiosks.”

The notice provides practical guidance, including typologies of scams such as tech support, customer service, and bank impersonation scams. These scams often prey on vulnerable individuals, particularly older adults, who may lack awareness of the risks associated with digital assets. Financial institutions are urged to adopt robust compliance frameworks and collaborate with law enforcement to combat these evolving threats.

Implications for Consumers and the Industry

The implications of FinCEN’s notice are significant for various stakeholders. In the short term, financial institutions may experience increased compliance burdens as they enhance monitoring procedures. Consumers, particularly those unfamiliar with digital currencies, may face disruptions when using CVC kiosks due to heightened scrutiny. In the long term, the notice could lead to stricter regulations for kiosk operators, potentially reducing scam-related losses if measures prove effective.

The broader industry may witness a push for improved AML controls and technology upgrades to better monitor suspicious activities. While some industry stakeholders fear that overregulation could stifle innovation, the call for vigilant compliance is essential to safeguard the financial system. Consumer advocates emphasize the importance of education and awareness campaigns to protect vulnerable populations. The situation underscores the need for public-private partnerships and information sharing to address the challenges posed by digital asset-related crimes.