Watchdogs Report Increase in Scam Victims Losing Money at Bitcoin ATMs

• A Troy resident was misled into believing someone was sending money to Poker.com, although she doesn’t gamble.
• One con artist impersonated an Apple employee, while another pretended to represent her credit union.
• Michigan Attorney General Dana Nessel issued a consumer alert on April 8, cautioning residents about scams involving bitcoin ATMs that deceive consumers.

Stacy Hazinski received one of those pesky text messages alerting her of a $114.02 charge for a purchase she didn’t make. Concerned, she called the number that was supposedly associated with her Apple Pay account.

What followed was a conversation with scammers.

One simple call triggered a scheme that resulted in her entire income tax refund being stolen and her savings account emptied at a local credit union.

Despite filing her taxes early, she expressed regret during our conversation at her Troy condo, saying she now has nothing to show for her efforts.

Her total loss amounts to $17,500.

Scammers entice victims to use a bitcoin ATM

Her experience brings to light a key warning sign that consumers should be wary of today — how scammers are tricking individuals into withdrawing cash for deposit at a local cryptocurrency ATM, often found in party stores, gas stations, or grocery outlets.

Con artists craft elaborate narratives on how victims can safeguard their funds or evade legal trouble by depositing money into a cryptocurrency ATM.

The fraudsters, who might pose as representatives from trusted companies like Apple, Google, Internet service providers, or even law enforcement, conduct thorough research to know the locations of these ATMs in the victims’ neighborhoods. They instruct victims to withdraw cash from the bank and provide directions to a nearby crypto ATM.

Fraudsters even refer to bitcoin ATMs as “safety lockers,” according to regulators.

Michigan Attorney General Dana Nessel issued a consumer alert on April 8, highlighting the risks of bitcoin ATMs being used by fraudsters to exploit victims.

“Funds sent through bitcoin ATMs are nearly impossible to recover, and these machines lack proper oversight and regulation, making them appealing for criminals involved in fraud and money laundering,” Nessel stated.

Significant financial losses from crypto ATM scams

According to the Federal Trade Commission, consumers lost $66 million to fraud involving crypto ATMs in the first half of 2024. The actual figure is likely much higher, as many of these scams often go unreported. The FTC reported a sharp rise in losses involving these ATMs, increasing from $12 million in 2020 to $114 million in total for 2023.

Individuals aged 60 and above were over three times more likely than younger adults to report losses using a bitcoin ATM in the first six months of 2024, according to FTC data.

Once money is deposited into bitcoin, experts warn that it is transferred rapidly, making it largely untraceable. Consequently, banks are seldom inclined to reimburse victims since they withdrew the cash voluntarily.

The con artists instilled fear, pushing her to the ATM

On February 28, Hazinski received a barrage of alarming tales — starting with a caller named John claiming to be from Apple, followed by another named Eric, who suggested he was from her credit union — warning her that scammers were on the brink of accessing both her federal income tax refund and her savings.

The fake credit union employee advised her to transfer her funds into a “security” account to shield her savings from individuals apparently trying to send money to an account at www.poker.com.

“What? Why is my money involved in some online poker scenario?” she thought, becoming increasingly anxious, particularly because her savings were limited after a recent period of unemployment.

“I don’t gamble,” Hazinski recalled saying resolutely.

She insisted that her refund was not meant for gambling, nor would she allow her funds to be misused by others.

“It was incredibly stressful,” Hazinski confessed.

Scammers remained on the line to guide her through

The fraudsters kept her on the line most of the time, on occasion hanging up during disconnections. They instructed her to first go to the Community Choice Credit Union branch at 1740 Crooks Road in Royal Oak to withdraw $12,500, which she recalls was placed inside a zippered bag.

The criminals told her to keep the reason for the cash withdrawal a secret from bank employees. When questioned by a teller, she reiterated the tale provided by the man on the phone, claiming she needed the funds for home improvements.

Living in a condo she rents in Troy, she hadn’t planned any home renovations.

After the initial withdrawal, the man on the line told her to proceed to another Community Choice Credit Union location at 30 E. Long Lake Road in Troy, where he instructed her to withdraw an additional $5,000. The teller placed this amount in a paper envelope.

Following this, he claimed that depositing her cash at a bitcoin ATM was crucial for safeguarding her funds from scammers.

“So, I trusted him,” she shared, recounting our discussion at her dining table.

Then they directed her to make the deposit

Hazinski noted that the scammers instructed her to go to a local convenience store, BB’s of Troy, where patrons typically purchase liquor or lottery tickets. Instead of hitting the jackpot, she ended up losing her money immediately.

There, she was directed to a Bitcoin Depot ATM to deposit her cash.

The Bitcoin Depot ATM is situated near the front register, close to a case of BB’s Buzzin Brews, which are ready-to-mix drinks priced from $8.99 and up.

During my visit on April 12, I didn’t see any signs on the machine warning about potential scams. The screen displayed: “Touch the screen to get started. With Bitcoin Depot, experience hassle-free crypto transactions.”

When I called the store on April 16, I requested to speak with a manager, but was disconnected after mentioning the woman who lost $17,500 at the machine. No one answered when I tried to call back.

Hazinski remarked that while visiting the busy party store that February day, no one said a word as she took out the two envelopes stuffed with $17,500 from her purse.

“I spent at least half an hour putting money into that machine,” Hazinski recalled.

Unfamiliar with how to use a bitcoin ATM or create an account, she relied on the con artist’s phone guidance.

“He walked me through each step,” Hazinski noted.

At one point, the ATM required a QR code, and the scammer told her, “I’ll send you the QR code.”

She scanned it. “I later discovered that the QR code he sent went straight to his account,” Hazinski recounted. “I scanned that twice like a fool.”

As part of the scam, crooks text victims a QR code to scan at the ATM, and once scanned, the funds deposited go directly to their wallet. The money is effectively lost.

While still in the store, her 16-year-old son Joshua, a student at Troy Athens High School, called to inquire about her delay in returning home.

“I replied, ‘I’ll be home shortly,’” she recounted.

When she explained her situation, her son responded, “Mom, are you joking?”

He questioned why, if her bank account was supposedly at risk, the credit union hadn’t instructed her to transfer her funds directly to his account. It made no logical sense to use a crypto ATM.

This revelation sparked Hazinski’s realization that her son was right.

The man claiming to be from the credit union had previously told her someone would visit her the next day to provide a new debit card and account number, but no one arrived. After discussing with her son, she no longer anticipated anyone would.

“I’m left with all these bills and zero funds,” Hazinski said.

Fortunately, her father has been supportive in helping her manage some of her expenses, including rent.

Hazinski was laid off in August from her job as a robotics engineer, a field she has excelled in for roughly 25 years. Initially, she utilized her time off to care for her father, who was diagnosed with non-Hodgkin’s lymphoma, but thankfully, he is now in remission and she is actively seeking work.

While she has attended interviews, she suspects many companies, including auto suppliers, are delaying hiring due to economic uncertainties from the Trump tariffs. Though she supported Trump and his tariff strategy to increase government revenue, she hopes that job opportunities will soon improve.

Much like gift cards, bitcoin ATMs allow crooks to quickly access your money

Hazinski is far from the only person ensnared by this bitcoin ATM scam.

The reached a point where crypto ATM misuse became so prevalent that a leading Democratic senator introduced a bill in February aimed at protecting new customers most vulnerable to fraud by placing transaction limits of $2,000 per day and $10,000 within the first 14 days.

The Crypto ATM Fraud Protection Act, presented by Illinois Sen. Dick Durbin, the ranking member of the Senate Judiciary Committee, would mandate full refunds for fraudulent transactions involving crypto ATMs if the new customer reports it within 30 days.

The legislation would also require ATMs to implement a method for consumers to offer live, verbal approval for any transaction surpassing $500.

Additionally, ATM operators would have to display clear warnings about potential fraud risks for consumers.

In a Senate address, Durbin recounted the story of a man from New Lenox, Illinois, who lost $15,000 through a bitcoin ATM, after being solicited by impostors impersonating deputies from the Will County Sheriff’s Office. They falsely claimed he missed jury duty and needed to pay a fine to avoid arrest.

Durbin emphasized the urgent necessity for “commonsense guardrails” to control fraud within this largely unregulated sector.

Bitcoin Depot’s response

Bitcoin Depot, which operates the ATM at BB’s of Troy and over 8,400 kiosks across North America, has stated that the company prioritizes “prevention and user safety while making crypto more accessible and secure.”

According to a spokesperson for Bitcoin Depot, “We provide multiple scam warnings throughout the transaction process and offer real-time support via phone, text, chat, and email to assist users before completing a transaction.”

Bitcoin Depot also shared images of various warning notices, one of which is a permanent label beneath the keypad on the kiosk, stating: “Warning: Have you received a call demanding payment in bitcoin? This is likely a scam. All bitcoin transactions are irreversible.”

However, I didn’t observe any such labels when I checked the ATM in Troy on April 12.

Other warnings, according to the company, will appear throughout the transaction. These include alerts to new customers, advising against using the Bitcoin Depot ATM for payments to governmental entities, law enforcement, employers, tech support firms, or anyone claiming you’ve been hacked.

Another warning appears before a wallet is scanned stating: “Are you being scammed? Do not buy bitcoin for IRS payments, utility bills, or if someone claims you have been hacked or are under investigation. These are scams.”

This warning also informs users that “losses due to fraudulent or accidental transactions may not be recoverable, and transactions in virtual currency are irreversible.”

Hazinski mentioned that she did not notice any scam alerts while she was following the instructions provided by the con artist.

“I didn’t receive any of those warnings,” she responded via email after I sent her images of the Bitcoin Depot warnings.

I first reported on scammers exploiting bitcoin ATMs approximately three years ago. In that instance, a 27-year-old woman believed she found a legitimate work-from-home job but ended up losing $500 to scammers who sent a fraudulent check to her Oakland Township residence, asking her to purchase Apple products in order to work remotely.

However, first she was instructed to deposit money into a bitcoin ATM at the Star Market in Lake Orion as proof of her residency before they would send her any equipment. Like Hazinski, she had never purchased bitcoin previously.

More: Easy-to-find bitcoin ATMs, QR codes used as weapon by scammers: What to know

In another 2022 instance, a couple from northern Michigan received a deceptive call purportedly from “Apple Support.” This led them to withdraw a staggering $350,000 from multiple banks, which they subsequently converted into cryptocurrency through scammers, utilizing both bitcoin ATMs and wire transfers, as reported by the Grand Traverse Sheriff’s Department.

In 2024, reports revealed that consumers experienced greater financial losses from scams involving payments via bank transfers or cryptocurrency than from all other payment methods combined. Victims reported losing $2 billion via bank transfers and $1.42 billion through cryptocurrency, according to data from the Federal Trade Commission. These scams also encompassed fraudulent investment schemes, alongside the cash lost at bitcoin ATMs.

More: Scammers stole record-breaking $12.5B from Americans in 2024, FTC says

Fraudsters exploit the general lack of understanding surrounding these ATMs. Consumers must recognize that they should only send cryptocurrency to wallets they control.

Once cryptocurrency is transferred into someone else’s wallet, experts advise that recovery of funds is impossible.

The Community Choice Credit Union stated that it regularly disseminates information to alert customers about fraud, including risks associated with bitcoin. They assert that warnings about bitcoin ATM scams have been shared on their website and through social media platforms.

“We are deeply concerned and saddened to learn that one of our members fell victim to fraud,” said Jeff Dubey, vice president of Enterprise Risk Management for Community Choice Credit Union.

In a statement provided to the Free Press, the credit union revealed that frontline staff will encourage members to consult with the risk management team if they suspect a potential fraud victim.

“Our internal teams are informed about current scam methodologies and are trained to assist members who signal they have been directed to withdraw funds for suspicious reasons,” the statement indicated.

The credit union highlighted that fraudsters are increasingly sophisticated, capable of “spoofing” financial institution phone numbers and dispatching texts to gain control of accounts. “They frequently utilize fearmongering tactics via phone calls, demanding that consumers purchase gift cards, wire money, or deposit cash into bitcoin ATMs,” the credit union continued.

Lt. Ben Hancock of the Troy Police Department remarked that recently, there has been a noticeable increase in scams where perpetrators demand payment via bitcoin or cash.

For instance, on March 16, a 61-year-old Troy man reported to police that he was contacted by someone impersonating a representative from the Department of Justice. The impostor informed him that his bank accounts had been compromised and his funds could be stolen if he did not act quickly to safeguard his cash.

More: Easy-to-find bitcoin ATMs, QR codes used as weapon by scammers: What to know

The fraudsters instructed him to transfer $33,000 to a Coinbase account, an online platform that promises speedy transactions for buying and selling crypto. After making the transfer, the victim was contacted again and told to transfer any remaining funds to preserve them. The man refrained from sending more money.

Hancock articulated a reminder that scammers impersonate governmental agencies and trusted brand names. No legitimate federal agency or business, he stated, will contact you demanding immediate payment through cryptocurrency, cash, or other means.

“While we still observe some gift card scams, currently the prevalence of bitcoin and other electronic payment scams is increasing more than gift card schemes,” Hancock added.

His advice? Avoid purchasing bitcoin or transferring funds through alternative means to resolve bills or issues.

“Always conduct your research and reach out directly to the company that these individuals claim to represent to verify their identities,” Hancock warned. “Chances are they are not who they say they are.”

Contact personal finance columnist Susan Tompor: [email protected]. Follow her on X @tompor.