The rise of cryptocurrency has brought with it a surge in fraudulent activities, with Bitcoin ATM scams emerging as a particularly lucrative venture for criminals. According to a report released by the U.S. Federal Trade Commission (FTC) on Tuesday, scammers operating through Bitcoin ATMs have already defrauded consumers of $65 million in the first half of 2024. This marks a staggering increase in losses, with the amount nearly doubling every year since 2020.
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The FTC’s report reveals that the losses due to Bitcoin ATM scams have increased nearly tenfold from $12 million in 2020 to a whopping $114 million in 2023. The scam has evolved over the years into various similar versions, all aimed at luring victims into making payments to the scammers.
Bitcoin ATMs are physical machines located in places like gas stations and grocery stores where users can buy or sell cryptocurrencies. The scam typically unfolds when fraudsters contact their victims via phone, text messages, or online pop-up windows. They often pretend to be bank or government officials and convince the victims that their bank accounts have been compromised, necessitating immediate action.
The scammers then instruct the victims to withdraw a substantial amount of cash and deposit it into a Bitcoin ATM, which they might refer to as a secure lock, to ensure the safety of their funds. Once the cash is inserted into the ATM, the scammers send a二维码 to the victim, which, when scanned on the machine, transfers all the cash into the scammer’s cryptocurrency wallet.
This year, the median loss reported from Bitcoin ATM scams has been $10,000. The Federal Bureau of Investigation (FBI) issued a warning about this type of fraud in 2021, and since then, states like Vermont and Minnesota have enacted laws imposing daily transaction limits on cryptocurrency ATMs to mitigate the risk.
The scam’s modus operandi is straightforward yet effective. Victims are often instructed to act quickly and without verification, which leaves them vulnerable to manipulation. It’s crucial to verify any emails or phone calls you receive from companies or financial institutions claiming to be legitimate, warns the FTC. Never withdraw money based on instructions from random interactions.
The rise of Bitcoin ATM scams is part of a broader trend of cryptocurrency-related fraud. On platforms like YouTube, deepfake videos of cryptocurrency scams have emerged, where malicious actors posing as journalists dupe victims into emptying their digital wallets. Additionally, so-called pig butchering scams have led to the arrest of a former bank CEO who defrauded millions of dollars from investors in a fake cryptocurrency scheme.
The scam’s success lies in its ability to exploit the trust and urgency that come with financial emergencies. Scammers often use fear tactics to manipulate victims into acting quickly, leaving little room for rational thought or verification. The emotional manipulation and the sense of urgency are key components of these scams, explains cybersecurity expert Dr. Emily Thompson. Victims are led to believe that their financial security is at risk, and they act out of panic.
Efforts to combat these scams are ongoing. Law enforcement agencies are working to raise awareness and implement measures to protect consumers. However, the rapid evolution of technology and the anonymity provided by cryptocurrencies make it challenging to track down and prosecute scammers.
As the cryptocurrency market continues to grow, it is essential for users to stay vigilant and informed. Verifying the legitimacy of any financial communication and being cautious of urgent requests for money are crucial steps in safeguarding against these increasingly sophisticated scams.
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