Key Takeaways
- Bitcoin ATMs allow users to buy and sell cryptocurrency easily, but their simplicity and limited understanding among users make them attractive targets for scammers.
- Key Bitcoin ATM scams include the grandparent scam, romance fraud, pig butchering schemes, fake investment advisers, IRS spoofing, and hidden fees.
- To stay safe, verify the legitimacy of requests, never send money to strangers, check transaction fees before proceeding, and avoid acting under pressure or urgency.
- While Bitcoins ATMs are secure and follow strict regulations, scammers exploit their irreversible transaction nature.
Bitcoin ATMs have become increasingly common worldwide, providing a convenient way to buy and sell Bitcoin and other cryptocurrencies. These machines operate similarly to traditional ATMs but allow users to exchange cash for cryptocurrency or withdraw cryptocurrency as fiat currency. Their ease of use has fueled growth, with nearly 40,000 Bitcoin ATMs installed globally. However, this rapid expansion has also made Bitcoin ATMs a hotbed for scams.
In most cases, scammers exploit the limited understanding that many people have about how Bitcoin ATMs work. Victims, often unfamiliar with cryptocurrency, can be easily convinced to deposit money into these machines under false pretenses. According to the FBI, crypto-related scams have been surging, with millions of dollars lost annually to fraud.
To lower the risks of falling victim to a Bitcoin ATM scam, it’s essential to understand how these machines work. In this article, we’ll explain the most common types of Bitcoin ATM scams and how you can avoid them.
6 Bitcoin ATM Scams to Avoid in 2025
The first Bitcoin ATM was launched in 2013 in Canada and it wasn’t long before Bitcoin ATM scams started to rise. Here are some of the most common tactics that fraudsters use to scam people:
1. The Grandparent Scam
One of the classic scams from the past has made its way into Bitcoin ATMs. In the grandparent scam, the malicious party makes a call and claims to be their grandchild. They say they’ve been in a terrible accident or arrested in a foreign country, and they urgently need money to pay for legal fees or medical expenses. The caller often sounds desperate and begs you not to tell anyone else. They then direct you to a nearby Bitcoin ATM, telling you how to transfer the funds.
In this type of scam, the attackers prey on the victim’s emotional vulnerability and love for their family. By creating a sense of urgency, they pressure victims into sending money quickly without verifying the story. Since Bitcoin transactions are irreversible, once the funds are sent, there’s no way to recover them.
The scam exploits empathy and panic with victims often not realizing they’ve been tricked until it’s too late. One surefire way to avoid falling for it is to verify the legitimacy of the caller.
2. The Romance Scam
In this scenario, the victim meets someone online through a dating app or social media. Over time, the scammer builds trust and creates a fabricated relationship. Eventually, the scammer claims to be in financial trouble or says they need money for an urgent investment.
Then, they direct the victim to deposit cash into a Bitcoin ATM, promising to pay it back or share profits. Similarly to the grandparent scam, the trick lies in emotional manipulation. Scammers spend weeks or months developing a connection to make the victim feel invested in the relationship. Once trust is established, they exploit the victim’s desire to help someone they care about.
Romance scams prey on loneliness and emotional vulnerability. The promise of love or partnership clouds the victim’s judgment, making them more likely to fall for the scheme. Always be wary of any online connections that you’ve never met in person, especially if they’re asking for funds.
3. Pig Butchering Scam
The “pig butchering” scam is an elaborate scheme that combines social engineering with fake investment opportunities. Scammers approach victims via text, social media, or messaging apps, posing as friends or business contacts. They gain the victim’s trust over time, “fattening” the victim by convincing them to invest small amounts initially.
When the victim sees fake returns, they are encouraged to deposit larger amounts of money, often using Bitcoin ATMs. Eventually, the scammers disappear and drain all of the invested funds, leaving the victim with nothing. The name “pig butchering” comes from the idea of “fattening” (manipulating) the target before “slaughtering” (stealing from) them.
The deception exploits the victim’s desire to make a profit. By showing fabricated returns, scammers create a false sense of security and FOMO (fear of missing out), encouraging bigger investments. As a rule of thumb, if it seems too good to be true, then it’s probably a scam.
4. The Fake Investment Adviser Scam
Scammers can pose as professional investment advisers, contacting victims via email, phone, or social media. They promise guaranteed returns on Bitcoin or other cryptocurrency investments. The adviser provides detailed instructions on how to use a Bitcoin ATM to deposit funds into a specified wallet address.
The scam works because the victim believes they are speaking to a legitimate financial expert. Scammers may use fake credentials, websites, or testimonials to appear credible. Once the funds are sent, the “adviser” vanishes, and the victim is left with nothing.
This scam exploits trust and a desire for financial gain. Victims, particularly those new to cryptocurrency, may not know how to verify whether an investment opportunity is genuine. That’s why doing thorough research is always imperative.
5. IRS Spoofing Scam
This scam preys on fear of authority. The victim receives a call from someone claiming to be a representative of the IRS or a government agency. The caller claims that the victim owes unpaid taxes or fines and threatens severe consequences, such as arrest or asset seizure.
To resolve the issue, they instruct the victim to pay immediately using a Bitcoin ATM. The trick relies on impersonation and intimidation. Scammers use fake caller IDs and aggressive language to create panic, pressuring victims to comply.
The scam exploits fear and confusion. Many victims, especially those unfamiliar with how the IRS operates, panic under pressure and send the funds. If you ever receive a similar call, always double-check the legitimacy of the caller.
6. Unreasonable ATM Fees
Not all scams involve fake emergencies or emotional manipulation. In some cases, the Bitcoin ATM itself can be the problem. Some operators charge outrageously high transaction fees, sometimes up to 20% of the transaction value, without clearly disclosing these costs upfront. This is similar to fake traditional ATMs which are often found in tourist traps. S
In the Bitcoin ATM scenario, the user is often new to crypto and unknowingly completes a transaction without realizing the hidden fees. By the time they notice, it’s already too late.
This issue exploits user ignorance. Unsuspecting users lose money simply by not checking the fees beforehand. Always verify the fees for a specific Bitcoin ATM before doing any transactions on it.
How To Avoid Bitcoin ATM Scams
Even though Bitcoin ATMs are something relatively new, most of the scams are just adapted versions of familiar ones. While Bitcoin ATM scams can be devastating, you can protect yourself by following these guidelines:
- Verify the Story: If someone claims to be a family member or authority figure, take the time to confirm their identity. Call a trusted friend, relative, or even local authorities before taking any action.
- Never Send Money to Strangers: Whether it’s a romantic interest, an online friend, or an investment adviser, avoid sending funds to individuals you don’t know personally.
- Check Transaction Fees: Before buying or selling Bitcoin at an ATM, review the transaction fees. High fees are often a huge red flag.
- Be Skeptical of Urgency: Scammers create a false sense of urgency to pressure you into acting quickly. Take a step back and evaluate the situation logically, then figure out the next best action.
Are Bitcoin ATMs Safe?
Bitcoin ATMs themselves are not inherently unsafe. The majority of them are legitimate machines designed to facilitate cryptocurrency transactions. However, like any financial tool, they can be misused by bad actors. Most Bitcoin ATM providers adhere to strict regulations and security standards to ensure user safety.
The real risk lies in how scammers exploit these machines to deceive victims. With Bitcoin transactions being irreversible, it’s crucial to double-check every step of the process before completing a transfer. To stay safe, always use Bitcoin ATMs from reputable operators and avoid acting on unsolicited requests for funds.
Closing Thoughts
Bitcoin ATMs have made cryptocurrency more accessible than ever, but their convenience comes with a certain set of risks. Scammers continue to exploit victims through emotional manipulation, fear tactics, and hidden fees, often targeting those new to the space.
By understanding how these scams operate and taking precautions, you can protect yourself from becoming a victim. In conclusion, make sure that you always verify transactions, question unusual requests, and never send money under pressure.
