Arizona Regulators Alert Public to New Fraud Schemes Targeting Cryptocurrency ATMs

By Matthew Holloway |

The Arizona Corporation Commission (ACC) has issued a strong warning regarding the increasing use of Crypto ATMs in connection with cryptocurrency scams. Recent reports from the FBI reveal that consumers in Arizona have suffered losses exceeding $325 million.

A press release from the ACC Securities Division highlights a troubling trend. Data from the Federal Trade Commission (FTC) indicates that American consumers reported losses of over $110 million linked to scams involving cryptocurrency ATMs in 2023. This marks a tenfold increase compared to figures from 2020.

Crypto ATMs resemble traditional machines, facilitating the purchase of cryptocurrencies using debit or credit cards. These kiosks can be found in gas stations, convenience stores, and shopping malls. Unlike traditional ATMs, they convert cash into cryptocurrency for a fee, depositing it into an electronic wallet.

Portal scamming, prevalent at ordinary ATMs and retail locations, has expanded to include Crypto ATMs. The ACC describes the mechanics of these scams:

“Scamming begins through online chats, social media, emails, texts, or pop-up messages. Scammers create a sense of urgency, prompting victims to withdraw cash and deposit it into a crypto ATM. Often, they fabricate investment opportunities with exaggerated promises of returns and minimal risk. The consumer inputs the scammer’s electronic wallet address or scans a provided QR code, resulting in the ATM transferring cryptocurrency to the scammer. Once transferred, the cryptocurrency is quickly moved, complicating recovery efforts.”

The commission offers proactive measures to help consumers avoid falling victim to these schemes:

• Do not click on links or respond to unexpected communications. Verify legitimacy by contacting businesses directly through official channels.
• Take your time. Scammers typically aim to rush you; pause to verify information with a trusted individual.
• Avoid withdrawing cash based on unsolicited requests. Legitimate parties do not demand this.
• Be skeptical of anyone claiming you need to use a crypto ATM for financial security or investment opportunities. Real organizations would not operate this way.

One reported victim, Tamara Glerum, lost $28,000 to a scam. As highlighted by AZFamily, Arizonans at large have experienced losses close to $325 million due to Crypto ATM fraud. Additionally, a Peoria woman lost $17,000 to similar tactics, prompting Arizona State Representative David Marshall to introduce House Bill 2387. This legislation aims to impose a $1,000 daily transaction limit on Crypto ATMs, mandate state operator licensing, and establish refund policy options.

Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for the latest updates or email tips to Matthew@azfreenews.com.