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The Essex County DA advises citizens to report cryptocurrency ATM scams
SALEM — Because cryptocurrency scams are one of the most popular tactics used by criminals to defraud victims, especially seniors, Essex County District Attorney Paul Tucker advises citizens to be careful and report fraudulent schemes that involve making of payments using Bitcoin or other cryptocurrencies at cryptocurrency ATMs.
A crypto ATM, sometimes called a “crypto kiosk” or “BTM” (Bitcoin ATM) is a physical machine that resembles a traditional ATM and allows customers to purchase cryptocurrencies such as Bitcoin using cash, debit, credit card or bank transfer – often with high transaction fees. There are tens of thousands of these machines in the United States, and the Boston Business Journal reported that there are more than 800 Bitcoin ATMs in Massachusetts. Crypto ATMs are intended to convert a user’s physical money into cryptocurrency and send that cryptocurrency to the user’s “digital wallet.”
“In many of these scams, users are directed to send cryptocurrency to the scammer’s digital wallet, and because these transactions are instant, there is no recovery period and the perpetrators can transfer the funds immediately,” says Tucker. “The nature of these scams varies, from romance-based schemes and lottery-themed schemes to impersonation schemes.”
Red flags may include directions to make financial transactions at ATMs while still on the phone with the other party, suggestions that the nature of the transaction be kept secret from bank tellers and everyone else, and insistence that cryptocurrency it is the only acceptable form of payment.
“Legitimate entities will not say that cryptocurrency like Bitcoin is the only payment option,” Tucker says.
An estimated $10 million in financial fraud was reported in Essex County last year. The total amount of money lost to scams could be much greater, as some victims of financial fraud do not report it. Tucker encourages citizens to be aware of the warning signs and urges victims of scams to immediately contact their local police department to report the crime.