SALEM — With cryptocurrency scams one of the most popular tactics used by criminals to defraud victims, particularly the elderly, Essex County District Attorney Paul Tucker advises citizens to beware and report fraudulent schemes that involve making payments using Bitcoin or other cryptocurrency at cryptocurrency ATMs.
A crypto ATM, sometimes called a “crypto kiosk” or “BTM” (Bitcoin ATM) is a physical machine that looks like a traditional ATM and allows customers to purchase cryptocurrencies such as Bitcoin using cash, debit, credit card, or bank transfer – often with high transaction fees. There are tens of thousands of these machines across the United States, and the Boston Business Journal has reported that there are more than 800 Bitcoin ATMs in Massachusetts. Crypto ATMs are intended to convert a user’s physical cash into cryptocurrency and send that cryptocurrency to the user’s “digital wallet.”
“In many of these scams, users are directed to send the cryptocurrency to the scammer’s digital wallet, and because these transactions are instantaneous, there is no clawback period and perpetrators can instantly transfer funds,” Tucker says. “The nature of these scams varies, from romance-based schemes and lottery-themed schemes to impersonation schemes.”
Warning signs may include directions to make financial transactions at machines while still on the phone with the other party, suggestions that the nature of the transaction be kept secret from bank tellers and all others, and insistence that crypto is the only form of acceptable payment.
“Legitimate entities won’t say cryptocurrency like Bitcoin is the only payment option,” Tucker says.
It is estimated that approximately $10 million of financial fraud was reported in Essex County last year. The total amount of money lost to scams may be much greater than that, given that some financial fraud victims do not report it. Tucker encourages citizens to know the warning signs and urges victims of scams to immediately contact their local police department to report the crime.
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