Ask someone in their 70s how easy it is to lose a life savings and they'll tell you it only takes a few minutes and a QR code. In 2025 scammers turned that simple, fast transaction into a major highway for fraud: between January and November of the year, frauds tied to cryptocurrency ATMs cost Americans roughly $333.5 million, according to FBI figures — a sharp climb from about $250 million in 2024.
What changed wasn’t magic. It was opportunity. There are roughly 45,000 crypto ATMs around the country. They take cash, pair that cash to a wallet address, and complete an irreversible transfer in minutes. For fraudsters, that combination of speed, ubiquity and low recoverability is irresistible.
How the scam works, in plain terms
Victims — disproportionately older adults — are typically pressured by impersonators claiming to be the IRS, a bank investigator, a tech support agent, or even a court official. They are told to withdraw cash and deposit it at a nearby bitcoin ATM or to scan a QR code that points the machine to the scammer’s wallet. Once the crypto moves, it's moved again, often overseas and laundered through mixers or converted to fiat via offshore exchanges.
Law enforcement and consumer agencies have repeatedly warned about the pattern: the Federal Trade Commission called crypto ATMs a 'payment portal for scammers' as early as 2024, and the FBI has highlighted how the speed and decentralization of crypto make stolen funds hard to trace. The bureau's Internet Crime Complaint Center keeps data on these trends at the IC3 website.
Who's getting blamed — and who pushes back
Attorneys general and state investigators have begun to treat crypto ATM operators like part of the story rather than mere infrastructure. A high-profile lawsuit in Washington, D.C., accused Athena Bitcoin of profiting from scams and estimated that 93 percent of deposits to its kiosks in the district were fraud-related. Athena countered that it provides warnings and cannot control user choices, likening its role to that of a bank's ATM.
Some operators say strict terms of service shield them legally. Courts in a few cases have sided with kiosk operators, citing user agreements that require customers to certify the ownership of the receiving wallet. That legal gray zone is part of why states such as Minnesota have opened inquiries and launched consumer surveys to collect firsthand accounts. Minnesota Attorney General Keith Ellison asked residents who have used crypto ATMs to report experiences and losses so regulators can better understand the problem and craft remedies.
When police get hands-on
Frustration with slow recourse has prompted dramatic actions. In one incident, Jasper County sheriffs physically cut into a kiosk to retrieve cash for victims, sparking a clash with an operator that argued the money seized belonged to the company. Those episodes underscore how messy and contested recovery attempts can be: breaking a kiosk may help one alleged victim while creating a property-dispute headache and possible loss for others.
The demographic and policy angle
Data show older Americans are especially vulnerable: roughly 43 percent of losses tied to crypto ATM fraud in recent reports involved people over 60. Advocates like AARP want tighter rules — from daily deposit caps to mandatory fraud-education prompts on the screens — while a patchwork of at least 17 states has moved to regulate or even ban kiosks in some municipalities.
Regulation can change the economics of scams by raising friction where fraudsters currently rely on swiftness and anonymity. But operators argue too much friction undercuts legitimate customers who rely on cash-to-crypto access.
New tools for old cons: AI and deepfakes on the horizon
Scammers are upgrading their toolkits. Beyond the disguise of an allegedly official phone call, many fraud campaigns now use social media amplification, fake websites and even AI-driven deepfakes to build credibility. Deepfake clips of public figures and faux endorsements can make a fake emergency feel real. Those technological risks link this problem to broader debates about AI and content authenticity; recent product launches and research in AI tooling have raised both the promise of defenses and the specter of misuse — see how consumer-facing AI apps are evolving in stories about OpenAI's Sora and the kinds of search-and-verification tools being developed like Gemini Deep Research.
What people can actually do — practical defenses
A lot of the harm is avoidable. Anyone who uses or considers using a crypto ATM should keep a short checklist in mind:
- Treat unexpected calls or messages demanding payment as automatic red flags; hang up and verify via official channels.
- Never scan a QR code handed to you in a high-pressure situation without confirming the recipient address independently.
- Use hardware wallets for long-term holdings; only a tiny amount should be moved from a secure wallet to an online one for spending.
- Before approving smart-contract requests or connecting a wallet, verify contracts on block explorers like Etherscan or Solscan.
- Report incidents promptly to local law enforcement, your state attorney general, and the FBI's IC3 portal. If you live in Minnesota, the attorney general's office is actively collecting reports and has an online survey for crypto ATM users.
What regulators and operators are debating now
Policymakers are weighing several responses: stronger licensing and disclosure requirements for kiosk operators, mandatory on-screen fraud warnings and limits on transaction sizes, and clearer pathways for victims to recover funds when fraud is evident. Operators argue many measures would make their service less viable for legitimate customers and shift responsibility away from people who willingly initiate transfers.
Court decisions around terms of service, pending AG investigations, and local ordinances will shape the landscape in 2026 as much as technological fixes. Meanwhile, consumers face the immediate choice of adding friction to their own habits: slow down, verify, and treat any urgent cash demand as suspect.
This is one of those consumer-safety stories that blends human vulnerability with rapid tech change. The machines are neutral; the trick is making sure the system around them — from corporate practices to state laws and everyday skepticism — catches up before another family wakes up to an empty bank account and an impossible trail to follow.