DATCP Focus: Cryptocurrency Kiosks

Many consumers have probably seen a cryptocurrency kiosk, also called a cryptocurrency ATM or BTM, in gas stations, grocery stores, other retail stores and businesses. But what are these devices, what are they used for, and why do scammers ask consumers to use them?

Similar to standard ATMs, cryptocurrency kiosks are used to make financial transactions. What’s different is that these kiosks are not used to access a bank account – they are used to buy and send cryptocurrencies such as Bitcoin and Ethereum. Data from the Iowa Department of Justice and the District of Columbia Attorney General’s Office suggest over 90% of transactions made through these kiosks were tied to fraud, and the FBI reported almost 11,000 complaints about scams involving cryptocurrency kiosks in 2024 – a 99% increase over 2023.

In 2024, consumers lost an estimated $9.3 billion to cryptocurrency-related fraud according to the FBI’s Internet Crime Complaint Center (IC3), much of which involved scammers tricking consumers into sending them money in the form of cryptocurrency. An easy and accessible way to do this is by using a cryptocurrency kiosk, which scammers sometimes claim are “government kiosks” or “safety lockers” so consumers will trust and use them.

Scammers impersonating a bank, government agency, or trusted business instruct consumers to withdraw cash from their bank account, deposit it into a cryptocurrency kiosk, and send it to a specific account. They sometimes do this by sending the consumer a QR code which can be scanned at the kiosk, and they may claim the account the consumer is sending money to actually belongs to the consumer. But as soon as the consumer deposits the money, it is gone – sent directly into the scammer’s wallet. Cryptocurrency is commonly used by scammers because it is difficult for law enforcement to trace and recover. Time is of the essence in these cases.

While legitimate cryptocurrency users access these kiosks to convert their cash into crypto, and in Wisconsin these devices are required to warn users about potential fraud as well as limit transactions to $2,000 daily. However, consumers must practice caution. If someone is TOLD to deposit their money at a cryptocurrency kiosk (even if the person giving them instructions uses a different name) to protect it or pay a bill, they are being scammed and should stop immediately. Remember:

· Only scammers will demand to be paid with cryptocurrency.

· Cryptocurrency transactions cannot be reversed.

· Cryptocurrency is not insured by the government

· Cryptocurrency payments do not have the same legal protections as payments made with credit cards or debit cards.