FTC Sensitizes Americans About Crypto ATM Scams As Crypto Fraud Increases

The United States Federal Trade Commission has warned the general public of the presence of a new playbook that is now being invoked by scammers that range from impersonation to theft using crypto ATMs.

The global growth of the crypto industry post-Covid-19 has made the industry a hotspot for nefarious individuals and bad players. The industry’s large size and complexity ensure that not all community members are fully sensitized to the dangers that the industry affords in terms of asset loss. Over the years, fraudsters have employed various ingenious methods to steal from individuals and organizations alike. Email hacks, phishing login info, amongst others, became very rampant last year.

How The Crypto ATM Scam Works

The FTC’s latest alert regarding crypto in the US addresses the advent of a new crypto scam that is now abundant in the country.

The scam framework has three major components: an impersonator, a crypto wallet address QR code, and a crypto ATM that will facilitate the transfer of funds through crypto.

According to an announcement by the body, scammers impersonate public and government officials, law enforcement personnel, or workers from localized utility companies. Other contact mechanisms could include social media catfishing or redeeming a prize that they have won and the utility of dating apps.

Regardless of the means of contact, the endpoint of the process is a request for funds by the fraudsters. Once a user falls victim to the woven tale, they are instructed to take fiat currency to any available crypto ATM around them to acquire cryptocurrency. Now that the crypto is acquired, the QR code comes into play, the scammer’s crypto wallet QR code will be provided as the destination address for the crypto acquired by the baited user, once the victim scans the code, the acquired crypto will be immediately deposited into the scammer’s account.

FTC’s Explicit Warning Concerning The Latest Scam

The consumer protection body released explicit warnings in its announcement through spokesperson Cristina Miranda from its Division of Consumer and Business Education, saying that it stays through to its mission of enforcing civil US antitrust law and promoting consumer protection. 

Miranda further explained that no individual from the government or government entity, law enforcement body, utility company, lottery company, or other business would ask for cryptocurrency payment for unclear or unknown services. She said, if someone does, it’s a scam every time.

Fraudulent Activities In the Crypto Industry Globally

Exploitations, Hacks, Money laundering, and Theft have become the mainstay in the crypto industry after its boom globally due to the cryptic nature of the technology that makes it difficult to discover perpetrators of these crimes.

The lack of standard regulations globally is also not helping matters regarding industry security for fraudulent activities. Different schemes to steal crypto are periodically fielded in the industry, ranging from scam crypto projects, phishing, fake crypto mining services, and many others now including the new ATM scam have battered the industry and will be a major hurdle that it has to overcome, in the future.

According to a crime report, approximately $7.7 billion worth of crypto was lost due to different scams alone globally in 2021. The amount of funds lost is a whopping 81% more than that lost in 2020 before the industry’s boom.

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