Scammers Leveraging crypto ATMs in Fraudulent Schemes
Scammers are increasingly incorporating crypto ATMs and kiosks into their fraudulent schemes, exploiting these digital currency exchange points to swindle unsuspecting victims. In a recent case, a woman from Troy, Michigan, was directed to a bitcoin kiosk at a local gas station after falling victim to a multifaceted scam. The scam commenced with an email requesting a refund for an alleged accidental overpayment of $3,966.
Victims Instructed to Use crypto ATMs
The woman, believing she owed money, was instructed to withdraw cash and deposit it into a bitcoin ATM. Despite complying with the scammer’s demands, she was informed later that not all the money was received, and she still owed $1,000. To settle this fabricated debt, she was directed to purchase two $500 gift cards and disclose the serial numbers to the scammers over the phone. In total, the woman lost $4,966.
Once the cash is deposited into a cryptocurrency ATM or kiosk, it promptly converts into digital currency, allowing the scammer to transfer the funds to other accounts, often overseas. The FBI’s Internet Crime Complaint Center reported over 2,000 complaints involving the use of cryptocurrency ATMs and kiosks in 2023 by individuals over 60 years old.
The decentralized nature of cryptocurrency poses challenges for law enforcement to trace stolen funds, as the digital wallet receiving the money could be located anywhere globally. Apart from cryptocurrency schemes, the FBI observed a surge in the “phantom hacker” scam in 2023, wherein couriers collect cash or precious metals from victims as part of a broader call center scam, typically tech support or government impersonation.
crypto Romance Scams on the Rise
crypto romance scams have also been affecting US citizens, leading to substantial financial losses. Recently, Shreya Datta, a 37-year-old tech professional from Philadelphia, fell victim to a cryptocurrency romance scam, resulting in financial ruin with losses amounting to $450,000.
Erin West, Deputy District Attorney in Santa Clara, California, disclosed receiving an average of 5-6 emails daily from individuals who have fallen prey to pig butchering scams. The stolen funds are funneled overseas to transnational criminal organizations in Myanmar and Cambodia, utilizing trafficked individuals as virtual slaves to execute the pig butchering scams.
Law enforcement agencies, including the FBI and the U.S. Department of Justice, cracked down on nearly 3,000 “money mules” earlier this year, who collect and transfer money on behalf of international fraud rings. These crime networks even recruit college students to collect payments from victims and open fraudulent bank accounts to channel illicit proceeds.
It is crucial for individuals to remain vigilant and cautious when dealing with financial transactions, especially involving cryptocurrency and online romance. Stay informed and report any suspicious activities to the appropriate authorities to combat fraudulent schemes in the digital realm.
