The FBI is warning people of a new breed of scam involving cryptocurrency ATMs. A con artist convinces a person to put cash into a cryptocurrency ATM and send the purchased coins to the scammer using an address stored in a QR code (via CoinDesk). While the actual scamming is relatively low-tech, it’s an interesting misuse of technology and shows how criminals are using crypto to “improve” on old methods.
As the agency describes it, the scammer will contact their victim and somehow convince them that they need to send money, either with promises of love, further riches, or by impersonating an actual institution like a bank or utility company. After the mark is convinced, the scammer will have them get cash (sometimes out of investment or retirement accounts), and head to an ATM that sells cryptocurrencies and supports reading QR codes. Once the victim’s there, they’ll scan a QR code that the scammer sent them, which will tell the machine to send any crypto purchased to the scammer’s address. Just like that, the victim loses their money, and the scammer has successfully exploited them.
Scammers are using tech to upgrade old tricks
If this scam sounds familiar, it may be because it’s basically just a tech twist on wire transfer fraud. Through whatever means, someone will convince their victim to send them money, and then have them do so using a method that’s difficult to trace, and almost impossible to undo. Like with wire transfers, the system is working as designed — being able to use a QR code instead of having to type in a long wallet address is something that’s handy for legitimate crypto purchases, too. It’s just that instead of going to your wallet, the funds are going to somebody else’s.
The “upgrade” (as it were) for scammers with the crypto ATM method is two-fold: it can be less friction than sending a wire transfer, and at the end the scammer has cryptocurrency instead of fiat. With wire transfers, you have to fill out a form, and you may give that form to an actual person (who could potentially vibe check you). Using the ATM method, there’s less time to reflect on the fact that you’re about to send money to a stranger. And, if you’re a criminal trying to get your hands on Bitcoin, you won’t have to teach your targets how to buy coins on the internet and transfer them to another wallet — they probably already know how to use an ATM and scan a QR code.