Massive Bitcoin ATM shutdown: Over 600 machines closed amid rising crypto scams – USA hit hardest!
3 min readA focused crackdown on cryptocurrency ATMs worldwide has resulted in the closure of over 600 Bitcoin ATMs in the first two months of Q3 2024, with the United States accounting for the largest share. Authorities have targeted Bitcoin ATMs due to their use in scams and criminal activities. Data from Coin ATM Radar indicates a significant reduction in the global Bitcoin ATM network. In July, 435 machines were removed, followed by 182 in August. The U.S. saw the most closures, with 411 in July and 258 in August.
According to Coin ATM Radar, losses from Bitcoin ATM-related scams have reached $100 million, with most victims being elderly
The increase in closures reflects efforts by enforcement and regulatory authorities to clamp down on financial crimes involving ATMs. In Chico, California, local government committees are tightening regulations, proposing to treat cryptocurrency ATMs similarly to banks. The U.S. Federal Trade Commission (FTC) reported a tenfold increase in Bitcoin ATM-related scams since 2020, with most ATMs located in the U.S.
Scams involving Bitcoin ATMs often exploit the anonymity and speed of cryptocurrency transactions. Scammers typically deceive victims with false reasons to send funds via Bitcoin ATMs. In 2023 alone, scams of this kind resulted in losses of $110 million, with seniors over 60 being three times more likely to fall victim. Reports show a continuing rise in the misuse of cryptocurrency ATMs and kiosks, including a case in Troy, Michigan, where a woman lost nearly $5,000 after being misled by an email claiming an overpayment.
Once cash is deposited into these ATMs, it is quickly converted to digital currency and transferred to scammer-controlled accounts overseas. The FBI reported more than 2,000 complaints related to cryptocurrency ATMs in 2023, with the majority coming from victims over 60.
The global crackdown on Bitcoin ATMs
Global enforcement of cryptocurrency ATMs isn’t limited to the U.S. On August 20, Germany’s Federal Financial Supervisory Authority (BaFin) seized 13 cryptocurrency ATMs from 35 locations. German authorities voiced concerns that these ATMs, without proper identification procedures, could become hubs for criminal activity, particularly for transactions exceeding 10,000 euros.
Similarly, Singapore’s Monetary Authority (MAS) has gone further by completely banning Bitcoin ATMs as part of broader cryptocurrency advertising regulations. These regulations have significantly impacted the cryptocurrency ATM market, with approximately 38,790 ATMs currently operating worldwide. The U.S. and Canada account for 91% of the total network.
According to Coin ATM Radar, the top 10 operators run 28,691 ATMs, controlling 74% of the global market. Australia has also seen significant growth in the sector, with over 1,000 Bitcoin ATMs operating as of early 2023.
Is the crackdown on Bitcoin ATMs a measure to prevent crime, or is it hindering the adoption of digital assets? Experts are divided
Industry professionals warn that the closure of Bitcoin ATMs could limit access to cryptocurrency, particularly for individuals who rely on these machines as their primary gateway to digital assets.
Markus Levin, co-founder of XYO Network, criticized the crackdown, stating:
“Bitcoin ATMs are great. They provide people with a way to enter the crypto space, especially those who don’t have other access. Shutting them down is nonsensical. No one is shutting down cash ATMs.”
Levin argues that regulatory actions are less about crime prevention and more about stifling the growth of the cryptocurrency market. Brian D. Evans, founder and CEO of BDE Ventures, echoed this sentiment, emphasizing the importance of Bitcoin ATMs as a key on-ramp for digital assets. He stated:
“I believe Bitcoin ATMs are highly useful to the industry, and I’m not sure the claims of criminal activity hold up. Any on/off-ramp benefits people who want to access Bitcoin and crypto assets. In the long run, people will have to trade directly, but for now, ATMs provide a solid solution where robust regulations are not in place.”
Evans suggested that the crackdown on Bitcoin ATMs is more about resisting full adoption of cryptocurrency rather than addressing criminal activity. Some operators, such as Bitcoin Depot, which runs 8,512 ATMs globally (21.9% of the total market), are taking preventive measures by adding on-screen scam warnings to their kiosks.
However, scam reports continue to rise, leaving uncertainty about the effectiveness of these measures. If improved regulations and technological solutions can work together, preventative measures could prove more effective than blanket bans.
