--- title: Once Heralded as the Future, Bitcoin ATMs Have Become a Huge Problem description: Crypto ATMs are coming under scrutiny from state regulators worried about escalating scams associated with the kiosks. authors: - name: Martha C. White role: Writer url: https://money.com/author/martha-c-white/ education: BA, English, Princeton University at_money_since: 2015 articles: 350 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Investing - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes published: '2026-05-26T12:30:39.000Z' section: Investing tags: - News word_count: 630 canonical: https://money.com/crypto-atm-scam-crackdown/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Crypto terminals](https://img.money.com/2026/05/News-Crypto-ATM.jpg) Cryptocurrency ATMs promised to bridge digital and real-world finance and to increase the adoption of tokens like bitcoin. Instead, what they delivered was fraud, bankruptcy and disappearing funds, according to lawmakers. The [anonymity](https://money.com/how-to-buy-crypto-bitcoin-anonymously-without-verification/) afforded by bitcoin and other blockchain-based tokens appeals to privacy-minded consumers. This attribute also makes crypto a gold mine for fraudsters, though, and crypto ATMs play a starring role. Crypto ATMs are owned by private companies that provide the technology for a physical “on ramp” between fiat currency (aka regular money) and the blockchain. About 80% of the world's nearly [30,000](https://coinatmradar.com/) crypto ATMs are in the U.S. These physical kiosks are sometimes referred to as bitcoin ATMs, although some let users buy [other tokens](https://money.com/bitcoin-ethereum-solana-beginners-guide/) like ethereum or stablecoins. People use cash or a debit card to [buy crypto](https://money.com/how-to-buy-bitcoin-first-time/) at these machines, some of which also let users sell crypto held in a [digital wallet](https://money.com/best-crypto-wallets/) and receive cash. Many fraud victims don’t realize until it’s too late that crypto ATMs are fundamentally different from their bank-operated counterparts. Because they look like normal ATMs, people often assume they’re affiliated with mainstream financial institutions — and covered by the same regulatory structure that includes guardrails and consumer safeguards. ## Crypto ATM scams are increasing This can be a costly misassumption. The FBI [reported](https://www.bleepingcomputer.com/news/security/fbi-americans-lost-over-388-million-to-scams-using-crypto-atms-in-2025/) a 58% year-over-year jump in crypto kiosk-related fraud losses; last year, Americans were swindled out of $388 million in these scams. Officials noted that seniors, who are less likely to be familiar with digital transactions, are often targeted by scams. “Traditional bank transfers or credit card transactions have fraud prevention measures. These measures provide customer [protection](https://money.com/debit-card-fraud-what-to-do/) or financial institution safeguards to stop or reverse the transfer. That is not the case with bitcoin ATM transactions,” Michigan’s consumer protection department wrote in a 2025 [report](https://www.michigan.gov/consumerprotection/protect-yourself/consumer-alerts/scams/bitcoin-atms) about crypto ATMs. Bitcoin ATMs operate outside the conventional banking system, which makes them easier targets for manipulation. "Scammers manipulate victims into using these ATMs to transfer funds directly into the scammers’ crypto wallets," California's Department of Financial Protection and Innovation [warned](https://dfpi.ca.gov/consumers/crypto/crypto-atm-scams/) in a recent consumer briefing about crypto ATM scams. "Transactions cannot be reversed and are often difficult for consumers to trace." Crypto ATMs have also come under fire for high fees and a lack of transparency around those fees. Users may not realize that they’re [paying](https://coincub.com/blog/bitcoin-atm-fees/) more than 20% of their transaction amount in fees until after the transaction has been completed — and that money is gone. People seeking to trade crypto for legitimate purposes can do so more cost-effectively via a regulated [exchange](https://money.com/best-crypto-exchanges/). As a result, lawmakers have started cracking down. ## States add consumer guardrails Bitcoin Depot, which operated a network of 9,000 kiosks, [filed](https://www.financemagnates.com/cryptocurrency/bitcoin-depot-shuts-down-9000-crypto-atm-network-following-bankruptcy-filing/) for Chapter 11 bankruptcy on Monday. It was a sharp reversal of fortune for a company that was, at one point, the largest crypto ATM operator in North America. Although the Trump administration has been [supportive](https://money.com/fed-kevin-warsh-crypto-investments/) of an expanding role for crypto in the financial system, the CEO of Bitcoin Depot blamed the company's failure on a hostile regulatory environment. This stepped-up oversight is largely coming from states. So far, Indiana, Minnesota and Tennessee have banned crypto ATMs. Connecticut suspended Bitcoin Depot’s business license. A number of other states have implemented tighter regulations around crypto ATMs such as transaction caps. Missouri Attorney General Catherine Hanaway called crypto ATMs “the new getaway cars for fraud” when [announcing](https://ago.mo.gov/attorney-general-hanaway-files-suit-against-crypto-atm-network-for-enabling-scams/) a lawsuit against another kiosk operator, CoinFlip, this week. (CoinFlip disputed the charges.) Other states have advised residents about the high risk of scams around crypto ATMs. “The money sent through Bitcoin ATMs is nearly impossible to recover. This fact makes them an attractive option for criminals engaged in fraud and money laundering,” Michigan regulators warned in last year's [report](https://www.michigan.gov/consumerprotection/protect-yourself/consumer-alerts/scams/bitcoin-atms). “They allow scammers to steal money quickly and anonymously.” ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/crypto-atm-scam-crackdown/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Investing", "item": "https://money.com/investing/" }, { "@type": "ListItem", "position": 3, "name": "Cryptocurrency", "item": "https://money.com/cryptocurrency/" }, { "@type": "ListItem", "position": 4, "name": "Once Heralded as the Future, Bitcoin ATMs Have Become a Huge Problem" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/crypto-atm-scam-crackdown/#webpage", "url": "https://money.com/crypto-atm-scam-crackdown/", "name": "Once Heralded as the Future, Bitcoin ATMs Have Become a Huge Problem", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2026-05-26T12:30:39.000Z", "mainEntity": { "@id": "https://money.com/crypto-atm-scam-crackdown/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/crypto-atm-scam-crackdown/#breadcrumb" } }, { "@type": "NewsArticle", "headline": "Once Heralded as the Future, Bitcoin ATMs Have Become a Huge Problem", "articleSection": "Investing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2026/05/News-Crypto-ATM.jpg", "width": 2880, "height": 1920, "caption": "News-Crypto-ATM" } ], "author": [ { "@type": "Person", "name": "Martha C. 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She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!)\r\n\r\nKatherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others.\r\n\r\nKatherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. 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