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Crypto ATMs have moved from a niche curiosity to a more mainstream presence since the first machine was installed in a Vancouver coffee shop in 2013. Over time, they’ve become more widely available, particularly in the United States, which now hosts a large share of these machines.

While the technology itself isn’t new, the rapid expansion and increased use of crypto ATMs in recent years have drawn greater attention — especially as fraudsters increasingly exploit these machines for scams.

How does a crypto ATM work?

A crypto ATM is designed to convert physical cash (or sometimes a debit card transaction) into cryptocurrency or vice versa. Popular digital currencies such as Bitcoin, Ethereum, Litecoin and Dogecoin are typically exchanged, while some machines also support stablecoins (cryptocurrencies pegged to traditional currencies like the U.S. dollar). 

Here’s how users convert cash to cryptocurrency at crypto ATMs:

1. Obtain a digital wallet capable of holding cryptocurrency.
2. Select the type of cryptocurrency to purchase.
3. Scan the QR code from the digital wallet to receive the crypto.
4. Complete any required identity verification, often via SMS code.
5. Insert cash or, in some cases, a debit card.
6. Confirm the transaction.

Many crypto ATMs also allow users to sell cryptocurrency, which generally reverses this process and results in either cash dispensed or a redemption code. 

So, what can go wrong?

According to the FBI’s 2024 IC3 Report, cryptocurrency-related crimes totaled $9.3 billion in reported losses. Specifically for Bitcoin-branded ATMs, reported losses reached approximately $250 million in 2024, with $333.5 million reported from January through November 2025. These figures reflect losses reported to law enforcement and are likely underreported.

Common fraud risks associated with crypto ATMs include:

• Fraudulent or illegitimate crypto ATMs designed to steal cash,
• Weak physical or software security on legitimate machines,
• Card skimming risks if debit cards are accepted,
• Victims being socially engineered into scanning QR codes that route cryptocurrency to fraudster-controlled wallets,
• Fraudsters directing victims to use crypto ATMs as part of broader scams,
• Cryptocurrency being transferred to a fraudster after purchase and
• Scammers insisting cryptocurrency is the only acceptable form of payment. 

Scams commonly tied to crypto ATM usage:

• Impersonation scams (including those of law enforcement, the IRS, utilities, tech support, financial institutions, subscription services, hospitals or government agencies)
• Investment scams promising high returns
• Romance scams
• Lottery or sweepstakes scams
• Social media purchase scams where payment is requested outside the platform
• Any urgent request that insists on secrecy and cryptocurrency-only payment

What financial institutions can do to help prevent crypto ATM fraud:

• Education: Provide ongoing education through mailings, social media posts, website alerts, account opening materials and in-branch signage, with strong emphasis that cash-to-crypto transactions are irreversible.
• Cash withdrawal monitoring: Watch for unusually large or frequent cash withdrawals and ask appropriate questions.
• Deposit monitoring: Review unusual deposits or transfers from savings, investments or retirement accounts that may indicate account draining.
• Staff training: Improve staff’s understanding of cryptocurrency and stablecoins to reduce the knowledge gap fraudsters exploit.
• Reporting: File detailed reports with FinCEN Suspicious Activity Reports (SARs), and encourage impacted account holders to report crypto-related scams to the FBI Internet Crime Complaint Center (IC3) and the Federal Trade Commission, ensuring details are clear and specific. Financial institutions may also submit IC3 or FTC reports when appropriate to support investigations. 

Crypto ATM fraud is just one of many evolving threats. To help your institution spread awareness, consider sharing our Cryptocurrency Scams Did You Know? video with your clients or loved ones, and check out our Cryptocurrency Scams toolkit, which includes social media content, article copy, ad content and more to support your prevention and awareness efforts.