The Dark Side of Crypto ATMs: Treasury Warns of Rising Fraud and Scams as Losses Near $250M
Amid the rapid proliferation of cryptocurrency ATMs across the United States, the Department of the Treasury has issued a warning about the growing risk of their exploitation for illicit purposes. In a recently published advisory, the U.S. Financial Crimes Enforcement Network (FinCEN) urges banks and other financial institutions to exercise heightened vigilance over transactions linked to these machines.
These devices—commonly referred to as kiosks for convertible virtual currencies (CVCs)—enable users to purchase cryptocurrency with cash and are typically installed in retail stores, gas stations, and other public venues. Despite their popularity, many operators fail to comply with the Bank Secrecy Act, neglecting to register as money services businesses, despite being legally obligated to do so. According to Coin ATM Radar, the number of registered Bitcoin ATMs in the U.S. surged from 4,250 in early 2020 to over 30,000 by August 2025.
This rise has been accompanied by a sharp increase in criminal schemes involving these terminals. In the past year alone, the FBI’s Internet Crime Complaint Center (IC3) received approximately 11,000 reports related to crypto ATMs, with total losses nearing $247 million.
Financial criminals often target elderly individuals, impersonating technical support or customer service representatives. Victims are given detailed instructions on how to locate specific ATMs and deposit funds—often unaware that their money is being funneled to fraudsters.
The Treasury is particularly concerned about the lack of oversight among certain operators. Criminals actively seek out machines with weak or nonexistent identity verification mechanisms, making it easier to launder funds. The agency highlights several red flags that should alert operators: numerous transactions just below the Suspicious Activity Report (SAR) threshold, customers making large deposits without any prior transaction history, and significant cash withdrawals followed by deposits into cryptocurrency ATMs.
The Treasury also calls on financial institutions to monitor customer behavior more closely. Individuals withdrawing large sums of cash and expressing intent to deposit them via crypto ATMs—or those who regularly use such terminals—should be viewed as high-risk.
These regulatory warnings coincide with mounting political pressure surrounding cryptocurrency kiosks. In February, Senator Dick Durbin introduced legislation that would require operators to register with the Treasury, disclose ATM locations, and provide users with detailed receipts to facilitate transaction tracking. If enacted, the law would impose transaction limits for new users and introduce refund mechanisms in confirmed cases of fraud.
International developments have further fueled concern. In July, New Zealand authorities issued a complete ban on the installation of cryptocurrency ATMs nationwide, while Australia tightened its regulations by imposing transaction limits and stricter customer verification procedures on operators.
Collectively, these actions reflect a global push by governments to exert greater control over a financial infrastructure that is increasingly being leveraged for money laundering, extortion, and fraud.
