TruCommunity Blog

Iowa Attorney General Breanna Bird recently announced her office sued two cryptocurrency ATM companies – Bitcoin Depot and CoinFlip – after Iowans lost more than $20 million dollars in three years through scams involving these machines. It is important to note these scams typically target those over age 60.

What are crypto ATM scams?

Crypto ATM scams occur when criminals trick someone into depositing cash into a cryptocurrency ATM. Cypto automatic teller machines allow consumers to use cash or a debit card to buy or sell cryptocurrency such as bitcoin. These machines do not dispense cash but rather connect to the Bitcoin network to transact. The scammers contact victims through social media, texts or phone calls. Then, these scammers use a fabricated, urgent scenario to convince victims to withdraw cash from their bank accounts and send it to the criminals using a crypto ATM. Instead of the money being converted into cryptocurrency, the money is deposited in the scammer's bank account. To ensure payment, the scammers may say the victim’s family is in danger or the victim will be arrested if they do not send the money. Some criminals tell victims they will get their money back, but cryptocurrency transactions are not reversible. Once the money is sent, it is gone. 

How can you protect yourself?

To avoid these scams, don’t respond to unexpected calls, texts or pop-ups on your phone. In addition, don’t click on links in unexpected messages. If scammers are claiming to be a part of an official government or business, hang up then contact the organization using information on its verified website. In addition, consider creating a family password or phrase. If the scammer claims to be a family member, ask for the code. This will allow you to know if you’re speaking to your family or an imposter. Above all, remember to never withdraw cash and deposit it into a crypto ATM. 

Currently, a bill (Senate File 449) is making its way through the Iowa Legislature to regulate cryptocurrency ATMs and limiting the monetary transaction amount consumers can make on a daily basis among other things. Minnesota, California, and Vermont have already implemented daily transaction limits for cryptocurrency ATMs.

To learn more about how to protect yourself from fraud, contact your nearest TruBank branch.