• The FBI has issued a warning about an increase in cryptocurrency ATM scams and has provided a way out for users

  • The FBI has issued a public warning to citizens about a recent rash of scams and fraudulent activities. According to the law enforcement agency, the scams make use of cryptocurrency ATMs and QR codes. Because cryptocurrencies are decentralized, it is difficult for operatives to recover lost funds.

    Scams and crypto-related fraud have reached a peak in 2021, costing individuals billions of dollars in losses. In light of this, the Federal Bureau of Investigation advises the general public to avoid potential pitfalls.

    The Method – Cryptocurrency ATMs and QR Codes

    The FBI has issued a public service announcement warning the public about the growing prevalence of scams involving crypto ATMs and QR codes. According to the announcement, scammers are increasingly turning to cryptocurrencies to facilitate their illegal schemes, rather than traditional bank transfers or wires.

    According to the announcement, “the FBI has seen an increase in scammers directing victims to use physical cryptocurrency ATMs and digital QR codes to complete payment transactions.”

    According to the FBI, the most common scams involve online impersonation, in which the scammer assumes the identity of a government agency, utility company, or legal office. Others include romance scams and lottery schemes, in which the scammer coerces victims into transferring money to him. The reliance on cryptocurrency ATMs to complete the scheme is a common denominator among these scams.

    According to the FBI, the scammers instruct victims to withdraw funds from investment or retirement accounts and then visit a physical cryptocurrency ATM to buy cryptocurrencies. To “auto-populate the recipient address,” a QR code of the scammer’s cryptocurrency wallet is provided. According to the FBI, “the scammer is in constant online communication with the victim and provides step-by-step instructions until the payment is completed.”

    How to Safeguard Yourself

    The FBI advises the public to take certain precautions to protect themselves as part of the announcement. The agency advises people to follow the age-old rule of not sending money to people they’ve only spoken to online and “not to follow instructions from someone they’ve never met to scan a QR code.”

    Individuals should exercise caution when an entity claims to only accept cryptocurrencies, and they should avoid cryptocurrency ATMs that prioritize anonymity by asking for only phone numbers or email addresses.

    “If you are using a cryptocurrency ATM and the ATM operator calls you to explain that your transactions are consistent with fraud and advises you to stop sending money,” the warning stated.

    According to Coin ATM Radar data, the number of cryptocurrency ATMs has increased by 71.73 percent in 2021. The global ATM network has grown from 13,993 in January to more than 24,000 ATMs today.

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