Buy Bitcoins at Bitcoin ATMs

Avoid scams – don’t use bitcoin ATM when someone asked you

With introduction of cryptocurrencies in our lives, they became instrument for funds transfer not only among users with legitimate purposes, but also for fraudulent activity. Usually, the victims are the less knowledgeable people, who are instructed by scammers what to do, and who send large amounts by using bitcoin ATMs. The advantage of using cryptocurrencies by scammers is because payments are non-refundable, i.e. once the payment is done and confirmed at least in 1 block, there is hardly anything can be done to revert the payment. Advantage of using cryptocurrency ATMs is that they are the easiest bridge between old traditional fiat world (accept cash banknotes) and new cryptocurrency world, so easy way to transform to cryptocurrency.

If you are asked or forced to use a bitcoin ATM in order to deposit cash and scan a given to you QR code — please STOP. This is a scam, and you will lose all money.

Fair to say that similar schemes were long time used by scammers with different money transfer vehicles, e.g. users are asked to buy gift cards or various vouchers types. Cryptocurrencies and bitcoin ATMs as conversion mechanism are much easier for scammers to use. First of all, bitcoin ATM is less understood by masses, and hence might look like something more “official” for a victim and more people can fall for a scam, which increases the probability of a fraud success. The figures from Edmonton Police Service confirm this, as a fraud using Bitcoin was larger than 80% of CRA scams in 2018:

Bitcoin ATM scam share

It also makes easier for scammers to use funds later (compared to gift cards and vouchers, which have limited convertibility and impose higher costs for this process). Bitcoin funds can be transferred internationally without problems.

Scale of scams

The scams are very broadly used geographically (internationally). Usually scammers target people from developed countries, like USA, Canada, United Kingdom, Australia. With growing number of bitcoin ATM installations in other countries the fraudsters become active in other countries as well. So geography of scams increases rapidly.

Scammers can be represented by some individuals, or based on activity seen it can be assumed there are call centers dedicated to this work. Mostly they are located in India, Nigeria, where from the calls originate.

On the victim side, the reported cases are usually in the low end of thousands of dollars. It is hard to estimate an average amount, but what we see in press the amounts are usually in $2000-4000 range. All depends on the victim and type of scheme used, at the same time there are reported cases when some individuals lost tens of thousands or even hundreds of thousands dollars. Community Affairs Chief of NYPD Nilda Hoffman reports during 4 months of 2019 there were 200 complaints and over 2 million dollars stolen. In the same video Dep. Insp. Jessica Corey mentions there were scams of over 400’000 dollars from one person, but through wire transfers. People are directed to buy as large as 10’000 dollars of Apple gift cards etc.

Here is a redacted email from one of the victims we received to our support email a while ago (published with permission):

My name is Mrs XXX XXX 46yrs old. Lives in XXX. I’m a mother of 3 young children aged 6/9/14. I want to report the fraud people who acted as HMRC and high authority to get a big amount of money from me using the Bitcoin machine and sending me code telling me that I owed the government unpaid tax by not paying enough tax and to prove this is not me I have to pay in money to resolve the case and this is refundable once cleared. I trusted this person who named himself as HMRC investigation officer as the number showing on my phone when checked by me was HMRC telephone number.

After I paid in the amount they said I have been referred back to the police officer investigation unit and telling me that the warrant of arrest was already in the police custody so to be able to withhold the case is to pay in warrant arrest fee. I was so scared at time as they become hostile to me and threatening me that if don’t act fast it will affect my work and high court magistrate authority will confiscate my passport, driving license, bank accounts and all my assets as this was government properties and this will make impact to me from travelling as there was an accusation against my name.

After they took my cash they told me in order to get a new national insurance I have to clear my name by building funds to generate a new National insurance. They ask me to use my credit cards by buying one4all cards, itunes cards, google play, steam and xbox voucher cards and by this I can generate funds to resolve the case.

They advised me not to disclose the case to anyone as this may affect the case and I could potentially loose the amount I already started to pay in. I was so scared at that time that I felt I cannot turn to authority as the case already in place they constantly on the phone with me as if I’m under surveillance. I was asked to go to bank make overdrafts and personal loans to be able to generate funds for my new NI. They even use my account to transfer money as if they acted helping me to generate funds amounting to £75000.

The final payment was I have been asked to sell my car as the authority only given me time-frame to generate these funds otherwise the high court authority will be in my house and seize my assets so to avoid this I sold my car and paid the money to the said funds. When I have nothing to give to pay in the funds they stop their communication to me. I have reported this to Police Action Fraud Line with crime reference number: NFRC XXX. 
I would be grateful if you can extend your help to me to stop this people behind this inhumane act and put them behind the bars. I have all the proof of BTC address and transaction ID and Bitcoin ATM location are as follows: 

XXX List of locations with BTC addresses and amounts provided (total amount via BTMs roughly £25000) XXX

I am thanking you already for the time you will be giving to this matter in the spirit of Christmas may all God bless you. 

Respectfully yours 

Email from victim of a scam via bitcoin ATM’s

This is just one of many cases. Scammers intimidate victims and basically refer the person from one scammer in a call center to another one (e.g. in this case “tax authority representative” passed victim to a “police department”, and they continued with elaborate scams). Victims can be led and controlled for long periods (weeks, or months), and being threatened they don’t report or tell anyone who could help. In the end, when money is sent, contacting police can be hardly of any help, while payments are non-reversible.

How the scam works

The initial communication with victims can be one of the following:

  • Internet ad (usually some unreasonably good deal)
  • Email list mailing out (usually some good offer as well)
  • Cold calls (usually introduce themselves as some official government authority representative, use intimidating tactics, or claim that something happened with victim’s relatives)

The following diagram shows the process flow:

Scams via bitcoin ATM
  1. Initially user gets in contact with scammers, who either persuade or force (intimidation techniques) to use a bitcoin ATM nearby. Usually they provide instructions where to find the closest machine and how to use it. They also provide their own address QR code, which victim needs to use at a bitcoin ATM. In most cases, victim is controlled over phone during the process. Scammers say what to click at an ATM and which menu to choose / skip. Moreover when scammers call a victim they use “spoofing” technique to manipulate the caller IDs and appear as if the call is actually originating from relevant authority representative.
  2. At this stage the user scans the QR code of scammer’s address, and deposits cash.
  3. Transaction is executed, however, the funds are not delivered to the user address, but directly to remote scammers, while they provided the QR code with their address to scan.
  4. User realizes he/she was scammed (this happens only in some cases, while in many cases people don’t report anywhere), and contacts operator of the ATM and local Police Department. However, if transaction was broadcast to the Bitcoin network and confirmed on the blockchain — there is no way to get money back, as transactions are non-reversible.

It is hard to prevent such scams and the only efficient way to avoid it is when operator implements tracking of suspicious transactions and stops processing such transactions (doesn’t send bitcoin funds) until further clarification. Usually they get in contact with the user and clarify that the user is not a victim of a scam.

Lately scammers started providing their own phone numbers to the victim, which the latter inputs at an ATM during the transaction. In this case operator’s support team will be in direct contact with the scammer and it is a matter of recognizing whether there is a genuine user on the other end of line or not, which requires well trained people and poses extra costs to operators.

Standard fraud schemes

There are several known fraud schemes, which are used in order to direct people to deposit money at bitcoin ATMs. Usually they can be assigned to one of the following groups:

  1. Much better than market conditions deal / offer
  2. Job opportunities
  3. “Official authority” request to pay for something

Better than market deals

Ebay / Craiglist car deals

There is an ad placed for a well under-priced used car. Potential buyer contacts seller and in response receives “officially” looking email, which requires for the car to be paid in Bitcoin and also includes direction to a bitcoin ATM nearby and instructions. Once the payment is done via bitcoin ATM, scammer disappears and never replies back.

Here is a sample message with fake reasoning why the car is so cheap that was sent to one of victims:

Hello XXX My name is Mary, happy to see you are interested in my 2008 Jeep Wrangler X 4WD 2D SUV. Let me give you a few details about it. Really good shape, never had any problems with it, no scratches or dents, 120,406 Miles, Automatic, 3.8L V6 12V MPFI OHV engine, the title is clear under my name. The price was reduced at $1400. I’m selling it so low due the fact that my Medical team will deploy back overseas on May 11th for a 18 months contract and it’s not worth keeping insurance and paying storage fees for it so there’s no use on keeping it, therefore I need a fast and reliable buyer. If you have any other questions, please feel free to ask. PS: You can found more pictures attached. Sincerely, Senior Medic Sgt Mary

Job opportunities

The scheme suggested is pretty common to “money mules”, when the “employer” sends funds to victim’s bank account, then victim (in the role of employee) needs to cash out and send over other payment method. In this case user is instructed to deposit cash (deducting own part) at local bitcoin ATM, and send funds to the scammer address (QR code provided). As a remuneration user is rewarded with % from amount (usually 5-10%). After bitcoins are sent, second transaction becomes irreversible. Normally, the initial transfer to victim’s bank account is reported as fraudulent and funds are revoked leaving the victim with lost funds.

Scammers send an introduction document of what the “employee” is supposed to do and then Contract as well:

Usually after one or several transactions the “Employer” disappears and doesn’t respond. Fund transfers are reverted by bank shortly after.

“Authority” requests

Tax authority / IRS representative

Victim is contacted by “representative” of tax authority claiming that taxes are not paid and that user needs to pay in the nearest time, otherwise victim will be arrested or deported, property confiscated etc. All various forms of intimidation tactics are used to hook the person and follow the steps they instruct. They provide information that unpaid amount needs to be sent over bitcoin ATM, they supply QR code with address and direct the victim to the nearest bitcoin ATM. Once the payment is conducted, scammers disappear, or depending on the situation might continue with fraud by making other calls pretending to be other official authorities (see email above).

Police / Law Enforcement Officer

Scammer calls and pretends to be from Police. They usually claim that victim is on criminal list and there is arrest request in processing. The only way to avoid this, is to pay in the nearest time. Then it is the same as in other cases, user is directed to bitcoin ATM where irreversible transaction is completed.

Another intimating technique is to claim that something happened to relatives, e.g. son / daughter, grandson / granddaughter, and payment is required to stop the case from further processing, while in this case matters will become only worse. As a result they instruct how to transact funds, when a person usually is sent to bitcoin ATM to make a fund transfer.

SSN deparment

Scammers call and pretend to be from Social Security Administration. They then claim that victim’s SSN was used in criminal activity, like drug trafficking or money laundering. To avoid arrest or protect their money they need to pay to resolve this situation. Then user is directed to closest bitcoin ATM for deposit.

Utility department

Scammers call and introduce themselves as personnel from utility company. They claim that victim has a debt for provided services, e.g. electricity or other utility services. They threaten to turn off the service supply and require to make immediate payment to cover debt. Then victim is directed to bitcoin ATM.

How to avoid being scammed

These scams usually target not knowledgeable people. It is important to understand, that fraudsters use intimidating techniques and in many cases are good psychologists to play with people’s feelings like fear or greed.

There are couple things to remember:

  • Cryptocurrency payments are irreversible. Once sent, money is lost.
  • No official authority will force you to pay through a bitcoin ATM.

The following statement is true in general:

If someone asks you to use bitcoin ATM and to deposit cash for whatever reason — this is usually a scam and your money will be lost.

How to prevent scams

Prevention of such scams is not an easy job. First of all they masquerade behind normal transactions. And any extra prevention measures (like temporary stopping processing of transaction) will in many cases hinder the flow for normal users as well and operators need to find a balance of how strict the filter to be. Operators having algorithm and putting transactions on manual review is the most efficient method to stop it as of today.

On another note, it is against the interest of operators and leads into business ethics area. As a rule, the larger the volume, be it from genuine users or through scammers, — the larger the commission operators earn. There was a court decision in Canada in 2018, when under similar conditions victim was suing operator to get money back. Victim lost the case and operator had no obligation to return funds, while they provided financial services and it was up to the customer to check what and to whom she was paying.

There are many operators who are very vocal about struggle against such scams. This undermines the whole industry and brings it not in a good light in press and spoils first “cryptocurrency experience” for many new users. Here are several Twitter threads from bitcoin ATM operators talking about these scams:

Another way to prevent it, is to deliver a message to a victim, that they are being scammed. This can be done via warning messages at machine or via UI of purchase flow. Many operators put warning signs at machines:

Scam warning at bitcoin ATM
Bitcoin ATM Scam warning
Bitstop scam warning

Police officers do their job as well and put warning leaflets near bitcoin ATM’s:

Police warning Bitcoin ATM
Police warning Bitcoin ATM

Warning signs however, are not very effective at the same time according to information from several operators. People who are on the phone and led through the process by scammers usually ignore any kind of warnings.

It was recently discussed that incorporating warning message as an interactive part of the purchase flow might increase efficiency:

General Bytes as a response integrated an option to delay click on “Agree” button on Terms and Conditions page, giving a larger chance to victim to read a warning message on top of T&S. It is interesting to check out any statistics from operators using this feature, if it helped to prevent and reduce scams.


Scams with involvement of bitcoin ATM’s are run on a large scale. Various schemes and scenarios to fraud people change over time. Scammers are inventive and look for efficient ones all the time. Operators do a large work on preventing it via stopping suspicious transactions and handling them manually, but at the same time, many transactions still slip through. It is in common interest of industry participants to exchange experience and prevention techniques, also on the manufacturers side to provide software functionality to flexibly set prevention measures.

Further reading:

11 thoughts on “Avoid scams – don’t use bitcoin ATM when someone asked you

  1. I was just scammed by a caller 2 days ago. I really believed they were from the social security administration. I ignored ALL of the signs!! And there were soooooo many. Please beware.

  2. I realize that this article is from last year but beware, some of these scammers are now starting to use dating sites to find their victims, unfortunately for the last two that try it on me I have a criminal justice degree and I am very vigilant in what I do, so there was no getting over on me. The scammers are praying on women they are saying that they are overseas and cannot have access to bitcoin machines, ATM machines and would like to wire money so that the women can go to ATM machines for them and withdraw money, this is a red alert right there. Other scammers are saying that they are deployed overseas, which is wrong of them to use the military as an excuse, saying the ATM machines are not working and asking for good google cards to be sent in $100 incrimates.I am just posting this morning for women and possibly men to be where that these men will try to say they love you say they want to be with you and then turn around and try to scam you.

    1. Amanda,
      I’m talking with someone from a dating site. I need some help to see if he trying to do the same thing. What are some warning signs??

  3. I was offered a job online after looking for one for months. This man pretended to hire me to Google Bitcoon ATMs in certain states. As I was in the process of googling the information he wanted, he asked me to go to the Bitcoin ATM & deposit some money that he would send me, then buy Bitcoin with the money at the Bitcoin ATM. This is a scam! There is no Job, and I would probably never get paid for the work I did. I sent the man packing, accused him of being a scam. Of course he promised me that, yes there were plenty of scams out there, but that he was not! Thank goodness I researched this type of activity before I lost any money! Thanks for being there to help people to know where to look for scammers!

  4. Thank you ladies for posting this, I think the dating site version is in the process of happening to me right now. He is very charming and trying to get me to accept cash from someone else to then go and buy Bitcoin and send him Bitcoin because he has been mugged and lost all of his belongings, in the hospital and needs money to take care of the hospital. I an not stupid but a little naive when it comes to Bitcoin, so I began my research. It truly breaks my heart that I appear to be in the middle of this guy doing this, I’m just thankful that I have not done anything financially or illegal. Beware Ladies!

  5. This happened to me last month with a job opportunity scam. I did not understand that money they deposited could later be viable for me. I was trying so damn hard to make sure I wasn’t scammed and I missed these signs. Now I owe $750(thankfully found out before it was more than that). Suffice it to say I’m having a sucky day.

  6. I think i am being scammed i met him on a dating site said he was working for government and on undercover mission said he loved me wanted to be with after just a few weeks says he cant video call or phone me for security reasons told me he was going to resign and come and be with me said he had millions in his bank and he was gonna take care of me he asked me to get steam cards for his flight over as he cant use his account on a mission so i sent him £1000 worth took weeks to get a ticket finally he got one yesterday looks fake said he has to pay for flight ticket for another agent to come and take his place he wants another £500 thru bitcoin i have been putting it of i really thought he loved me i am single mum i really wanted this to be real but i am starting to think its not

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