Crypto ATMs Emerge as Popular Method of Crypto Fraud Payments: FBI

The Federal Bureau of Investigation (FBI) Miami Field Office has warned that crypto ATMs are emerging as a popular method used by fraudsters to receive funds from defrauded victims.

The information was revealed as part of a public warning on October 3 about “pork slaughter scams” in which fraudsters pose as missing friends or potential romantic partners to extract money from victims.

The scammers “fat” their victims by showing a supposedly genuine interest in them to gain their trust, and then gradually introduce investment discussions into the relationship.

In the public service announcement in partnership with the Internet Crime Complaint Center (IC3), the FBI warned that victims of these pig-slaughtering crypto scams generally have no chance of getting their money back.

However, the FBI noted that it has noticed that scammers have increasingly asked victims to transfer funds via crypto ATMs, along with more familiar methods such as wire transfers and prepaid cards, noting:

“Many victims report being asked to make wire transfers to foreign accounts or purchase large amounts of prepaid cards. The use of cryptocurrency and cryptocurrency ATMs is also an emerging payment method. Individual losses associated with these schemes ranged from tens of thousands to millions of dollars.”

The FBI noted that in hog slaughter scams, victims are “coached through an investment process” and “encouraged to make continuous deposits by the scammers.”

“When victims try to withdraw their investments, they are told they have to pay income tax or additional fees, causing them to lose further funds.”

Crypto ATMs have long been used by fraudsters posing as government officials, law enforcement agents or employees of local energy companies, forcing victims to send them payments under the guise of paying bills or unpaid taxes to avoid further penalties.

There are nearly 33,500 cryptocurrency ATMs in the US according to data from Coin ATM Radar, with the US accounting for 87.4% of global crypto ATM deployment.

The US Federal Trade Commission issued a warning regarding crypto ATM scams in January, noting that the scammers sometimes pose as potential romantic partners.

The FBI urged people to “verify the validity of any investment opportunity” introduced by these types of people, watch out for domain names purporting to be legitimate exchanges, misspelled URLs, and not to download any apps if their legitimacy cannot be verified.

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Law enforcement agencies across the United States have warned about pig slaughter and romance scams on several occasions, and while it may be assumed that the victims are not well-educated when it comes to technology or investments, this is not always the case.

In June, it was reported that tech-savvy Silicon Valley professionals were being duped by a wave of scams in San Fransico, with several people losing more than $1 million apiece to this type of financial scam.