Bitcoin ATM installations have surged over the years as more convenience stores across the globe are adding them alongside traditional ATM machines. Despite many Bitcoin ATM machines popping up, it can still be argued that the average person does not understand how to facilitate transactions with Bitcoin. Scammers are taking this opportunity to expose individuals around the globe. In recent reports, scammers are targeting the elderly at local Bitcoin ATMs in Florida.
What Is A Bitcoin ATM ?
A Bitcoin ATM is simply a kiosk that allows people to purchase Bitcoin with a debit card or cash. In some scenarios, a Bitcoin ATM will be bi-directional meaning you can purchase Bitcoin with cash or you can sell Bitcoin for cash. Bitcoin ATMs are different than traditional ATMs since a BTC ATM is not connected to bank accounts. Instead, these machines are connected to the internet and leverage various cryptocurrency exchanges during a given transaction. Since Bitcoins are not physical assets, they have digital wallets that store their value. This is why a users tend to use a “Bitcoin deposit address” at ATM locations so the ATM knows where to deposit your Bitcoin. Depending on the software powering a machine, some BTC ATMs will have verification steps before a transaction is approved.
Bitcoin ATM Scam – Florida
According to a local report, Bitcoin scammers are targeting the elderly in Florida convenience stores. In recent developments, Lincoln Super Shop in Lakeland Florida has been a location for the scammers. A previous victim ended up losing $1,500 after using a Bitcoin ATM in the convenience shop.
Nimisha Chokshi, the store owner stated that she recently saw an elderly man trying to navigate a Bitcoin ATM for the first time. After three hours of frustrations, the older man told Nimisha that he received a call from the Polk County Sheriff’s Office sergeant saying that there was a warrant out for his arrest. If he wanted to avoid being arrested, the police office told him he needed to purchase Bitcoin ( deposit money into a BTC ATM ). Despite a previous victim losing money, Nimisha was able to avoid it this time after warning the man that this was a scam attempt.
“I say, ‘you better not send any money because this is a scam call,” said Chokshi. “It looked like to me, that he was trusting more to those people than me.”
How This Crypto Scam Works
During these recent developments, scammers have been using the “cold call” model. Scammers around the world will facilitate cold calls in which they introduce themselves as a government official, or in this scenario the Sheriff’s office. While using intimidating tactics, this slowly entices the victim to pursue the scammers agenda. In Florida, victims truly believed they were under arrest, and therefor followed through with the scammers directions.
After the victim approaches a Bitcoin ATM, they are usually provided a QR code from the scammers. This QR code holds the information to the scammers crypto wallets. After the victim purchases Bitcoin through an ATM and inputs this QR code, the Bitcoin is sent to the scammers digital wallet instantly. Since Bitcoin transactions are non-reversible, the victim loses out on all of that cash that he/she inserted into the Bitcoin ATM machine. This is completely different than traditional banking where the banks will essentially refund customers who have been exposed to scams. Since no central party is involved in a Bitcoin transaction, the loss is non-refundable. While inputing this QR code, the victim has no idea that it is essentially a routing number to the scammers Bitcoin wallet.
Bitcoin ATM Growth
In a recent report by Visionary Financial, it was outlined that Bitcoin ATM demand has skyrocketed +280,766% since 2013. With over 8,000 units now being installed globally, companies like LibertyX continue to scale throughout states like New York. Other popular operators include CoinCloud, CoinFlip, Bitcoin Depot, DigitalMint, and many others. As the world transitions into a digital economy, it will be crucial for people to understand Bitcoin transactions, and further understand how crypto transactions can pose more risks than traditional payments if one does not understand what they are doing.
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