Bitcoin ATMs increasingly used by scammers to target victims, critics say

In June 2024, when Fran Bates entered a Fort Worth-area gas station, she thought the voice on the other end of the phone was from her bank, and she thought a machine where she was in the process of feeding more than $23,000 would keep her money safe. 

Neither was true. 

The voice belonged to a scammer, and experts believe the call was likely made from overseas. The machine was a bitcoin ATM kiosk — one of more than 45,000 across the country. And on that summer day in Texas, the 85-year-old Bates became one of the tens of thousands of Americans who fall victim each year to scams perpetrated using bitcoin ATMs. 

“It’s a horrible, horrible experience,” Bates recalled in a recent interview with ABC News’ Jay O’Brien. 

The scammer convinced Bates that she was in danger of losing her savings, she recalled, and over the course of two days encouraged her to withdraw more than $40,000 in cash and deposit it into a special machine, where she was told it would be safe. 

The scammer even ordered her a car that delivered her to an area gas station, she told ABC News, where she began feeding $100 bills into the cash kiosk — his voice instructing her every step of the way. 

“That seems so hard to believe,” O’Brien told Bates about the scam. 

“I know,” Bates replied. “And you think if you had to listen to it, you would wonder, ‘What’s going on with that woman? Doesn’t she realize what they’re doing to her?’ No, you don’t.”

“But they’ve got you,” O’Brien said. 

“Oh, they have you right where they want you,” Bates said.

‘The No. 1 preferred method’ 

The FBI says scams perpetrated using bitcoin ATMs cost Americans nearly $250 million in 2024, more than double the sum from the previous year. And AARP is warning its 38 million members that bitcoin ATMs are increasingly scammers’ preferred means to dupe Americans. 

Bitcoin ATMs allow users to insert cash and send it to a digital wallet anywhere in the world. It takes only a few minutes, and once the transaction is executed, experts say, the money can be nearly impossible to recover — making it an attractive method for prospective fraudsters. 

“Have you seen an increase in how popular using crypto — and using these ATMs specifically — has become for a scam like this?” O’Brien asked Amy Nofziger, AARP’s director of fraud victim support. 

“Yes, requesting crypto is now the No. 1 preferred method of criminals,” Nofziger replied. “It is a huge problem.” 

Authorities have taken notice. Last month, the Washington, D.C., attorney general’s office sued Athena Bitcoin, one of the largest bitcoin ATM machine purveyors in the country, accusing it of “pocketing hundreds of thousands of dollars in undisclosed fees on the backs of scam victims.” 

The lawsuit claims 93% of the transactions on Athena’s devices in the District “are the product of outright fraud,” and that “the median age of victims was 71 years.” 

Athena forcefully denied those allegations in a statement to ABC News, asserting in part that it maintains “strong safeguards against fraud including transparent instructions, prominent warnings and consumer education.” 

“Just as a bank isn’t held responsible if someone willingly sends funds to someone else, Athena does not control users’ decisions,” the statement said. 

A ‘silent partner’?

AARP has advocated for more stringent regulations to protect Americans from scams on bitcoin ATMs, like capping the amount of money a user can deposit in one day. At least 17 states have passed legislation in recent years regulating the machines, and some municipalities have moved to ban them outright. 

But critics say some bitcoin ATM firms have been reluctant to embrace regulation, as it could conceivably hurt their bottom line. Some companies that operate the machines charge transaction fees that exceed 20%. 

“Do you think these companies know that, in large part, their ATMs are being used for scams?” O’Brien asked Adam Zarazinski, the CEO of Inca Digital, a cryptocurrency forensics firm. 

“They either know or they’re turning a blind eye to it, yes,” Zarazinski opined. 

Brenna Bird, the attorney general in Iowa, filed a similar lawsuit earlier this year against two major players in the space, Bitcoin Depot and CoinFlip, which she accused of being “a silent partner to many scammers’ preying on Iowans, taking a cut of each scam with its excessive and deceptive [bitcoin ATM] fees.” 

Bitcoin Depot and CoinFlip have both denied those claims in court and in statements to ABC News. 

Bitcoin Depot told ABC News that the “vast majority” of their transactions are “legitimate,” that they “are one of a few operators in the bitcoin ATM space to proactively require an ID for even the smallest transactions,” and that “customers receive up to four scam warnings before completing a purchase.” 

A spokesperson for CoinFlip told ABC News that the company “never wants to profit when honest people are duped by bad actors, which is why we refund transaction fees to victims in instances of fraud.” 

“We hold ourselves to the highest standards of consumer protection, compliance, and transparency,” the statement said. 

A ‘guardian angel’ and a ‘knight in shining armor’

While most victims never manage to recoup their money, Fran Bates’ story has a rare happy ending.

She owes it to Myndi Jordan, another customer at the gas station, who noticed Bates hunched over the bitcoin ATM machine, shoving thousands of dollars into it — and called the police. 

Jordan, who had herself been the victim of identity fraud, said she immediately recognized it as a scam. 

The two women sat down with O’Brien for a joint interview earlier this month, reuniting for the first time since that day in June 2024.

“I hate when somebody tries to take advantage of somebody that’s not able to protect themselves, or defend themselves,” Jordan told O’Brien. “And I feel like they were taking advantage of you. And I was like, ‘No, we’re not doing this today.'” 

Bates calls Jordan her “guardian angel.” 

As Bates continued to pour bills into the ATM, Lieutenant James Stewart of the White Settlement Police Department arrived on the scene. He grabbed Bates’ cellphone and confronted the man on the phone as the scammer implored Bates to execute the payment. She was just one click from losing it all.

“Ma’am, just you click on ‘I’m done,'” the scammer is heard saying on police bodycam footage. 

“No, don’t click ‘I’m done,'” Stewart told Bates on the bodycam recording. “Do not click anything.” 

Bates backed away from the machine — and the transaction was never executed.

Days later, after contacting the machine vendor, Stewart personally delivered a cashier’s check to Bates in the amount of what she entered into the machine. He even escorted her to the bank to deposit it back into her account.

Bates, in her interview with ABC News, called Stewart her “knight in shining armor.” 

“It felt amazing, being able to see it to the end and see the happy ending,” Stewart told ABC News.

“She gives amazing hugs,” Stewart said of Bates. “You know, that was the best part of it, I think.” 

ABC News’ Sara Avery and Patty See contributed to this report.