States Crack Down on Cryptocurrency ATMs Amid Widespread Scamming
Pam, a Connecticut resident, lost nearly $150,000 to romance scammers who convinced her to use cryptocurrency ATMs. The scammers provided detailed instructions on how to locate and use the machines.
The experience is not unique, as Pam's bank worked with state and federal law enforcement to recover some of the stolen funds. However, the cash deposited in the kiosks was irretrievable, highlighting a major issue with cryptocurrency ATMs.
Thirty-six states have banned or restricted cryptocurrency ATMs due to concerns over fraud and few practical applications. The machines are often used by scammers to extract money from unsuspecting victims.
Hawaii has taken a different approach, banning one functionality of the kiosks while allowing users to withdraw cash. However, lawmakers in other states have been unmoved by arguments from cryptocurrency ATM operators that bans will not prevent fraud.