Crypto ATMs: US Regulator Issues Emergency Warning on Fraudulent Schemes

The US Commodity Futures Trading Commission (CFTC) has issued an emergency warning about fraudulent schemes involving crypto ATMs. The regulator's directive, 'Pause Before You Pay,' identifies demands to transfer money through these machines as a major red flag of fraud.

According to the CFTC, Americans' losses from such scams have surged 58% over the past year, exceeding $388 million. The agency advises that any instructions from someone claiming to represent a government agency or bank to use a public crypto terminal should be treated as 'Probably a Scam.'

The warning comes after a prolonged infrastructure crisis this summer and a series of events critical to the industry led to the dismantling of the sector. In May, Bitcoin Depot, the largest US operator, filed for bankruptcy and disconnected all 9,700 of its terminals due to mandatory user verification requirements.

Crypto ATMs became an ideal tool for criminals because they send money in only one direction, unlike traditional banking systems. Scammers pose as employees of the Internal Revenue Service (IRS), banks, or technical support departments of major technology companies, using psychological pressure and creating a sense of urgency to get victims to withdraw cash.

The CFTC reiterates that no legitimate government agency, bank, or major corporation will ever demand that money be sent through a crypto ATM or via gift cards. Any mention of these payment methods during a conversation is a direct sign that the person on the other end is a criminal.