FTC issues a warning over a new scam involving crypto ATMs

By: Ali Raza
Ali Raza
Ali plays a key role in the cryptocurrency news team. He loves travelling during his spare time and enjoys… read more.
on Jan 11, 2022
  • The US FTC has issued an alert involving crypto ATMs.
  • In this scam, users are duped into sending money to fraudsters using the ATMs.
  • This comes as the money lost of crypto-related crimes surges.

The US Federal Trade Commission (FTC) has published an alert of a new scam that involves cryptocurrency ATMs. The commission has noted that the scam involves individuals impersonating government officials or utility companies.

The report from the FTC further states that the scam comprises three main features. These features are the QR code, the impersonator and a cryptocurrency ATM. Additionally, victims are duped into sending money using the provided crypto ATM.

Impersonators duping the public

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

The FTC noted that fraudsters were impersonating the identities of public and private officials. The imposters were also using dating applications in pretending to be potential romantic partners. They would also call the victims to announce that one had won a prize.

Despite the strategy used by the fraudsters to reach the victim, the scam always ended up with the fraudster asking for money from the victim. An individual that is convinced into sending the money is requested to withdraw cash and then go to a cryptocurrency ATM.

After that, the victim is asked to buy cryptocurrency using a crypto ATM machine. The scammer shares the QR code of their wallet address with the victim.

Individuals who are not knowledgeable about using crypto ATMs are duped using this code. The fraudster asks the victim to scan the code sent to them, after which the cryptocurrencies bought will be transferred into the account of the fraudster.

One of FTC’s executives from the Division of Consumer and Business Education stated,

Here’s the main thing to know: nobody from the government, law enforcement, utility company or prize promoter will ever tell you to pay them with cryptocurrency. If someone does, it’s a scam, every time.

Crypto crimes on the rise

This year, the boom in cryptocurrencies has created an opportunity for fraudsters that want to take advantage of new traders in the sector. A crypto crime report for 2021 showed that $7.7 billion worth of cryptocurrencies was stolen through various scams globally during the year.

This is a notable increase, given that the number of crimes was 81% higher than what was reported in 2020. The increase is partially attributed to an influx in crypto trading activities.  

Invest in crypto, stocks, ETFs & more in minutes with our preferred broker, eToro
10/10
67% of retail CFD accounts lose money