PROVIDENCE, RI -- Last week, the Commodity Futures Trading Commission (CFTC) issued a warning that crypto ATM fraud is on the rise. Crypto scammers use sophisticated methods to target older Americans, contact them and use threats, intimidation, and fabricated backstories to coerce them into depositing large sums of money into the criminals’ crypto wallets via cryptocurrency ATMs (also known as “Bitcoin ATMs” or “digital asset kiosks”).

In 2025, cyber criminals used crypto ATMs to defraud Americans of roughly $389 million, according to the FBI’s most recent annual Internet Crime Complaint Center (IC3). There were 13,400 crypto ATM scam complaints nationwide, including 55 in Rhode Island that drained over $1,513,740 from victims in the Ocean State alone.

The IC3 report shows a 23 percent increase in crypto ATM scam complaints and a 58 percent increase in monetary losses from 2024. More than half of the complaints involved victims over the age 50, with those losses costing over $302 million. And given the fact that many people fail to report fraud, the actual monetary losses from crimes involving America’s network of about 30,000 crypto ATMs is likely even higher.

Rhode Island has over 100 crypto ATMs currently in operation at places like local gas stations, convenience stores, and vape shops. These terminals look just like cash machines and allow users to deposit large denominations of dollar bills and quickly convert it into crypto currency which can then be instantly and irreversibly transferred to digital wallets using overseas exchanges that don’t have to comply with U.S. laws. Unlike with a bank or credit card transaction, once the money is sent, it can almost never be recovered. That is why crypto ATMs are used by scammers targeting older Americans.

While U.S. Senator Jack Reed (D-RI) lauds states like Rhode Island for taking steps to try to regulate crypto ATMs to prevent fraud, Reed, who serves on the Senate Banking Committee, says the Trump Administration has presided over an explosion in fraud and money laundering at digital asset kiosks, leaving consumers at risk, making it easier for scammers to profit from illicit transactions, and making it harder for states to combat rising fraud.

“The Trump family is profiting off of crypto ventures while the Trump Administration is failing to protect older Americans from scammers that are using crypto ATMs to steal their hard earned retirement savings. As the illicit financial losses pile up, the Trump Administration must be more proactive when it comes to enforcing anti-money laundering laws on the books and ensuring the owners and operators of crypto ATMs are helping to prevent fraud,” said Senator Reed, a cosponsor of the Crypto ATM Fraud Prevention Act (S. 710) to help prevent scammers from stealing Americans’ savings through cryptocurrency schemes.

The Crypto ATM Fraud Act would improve fraud warnings on all crypto kiosks; make cryptocurrency ATM operators develop a comprehensive anti-fraud policy, which must be submitted to the Financial Crimes Enforcement Network (FinCEN); and protect new customers -- who are most likely to be victims of fraud -- by limiting initial transaction amounts, requiring verbal confirmation of major transactions, and making victims of fraud eligible for refunds if they file a report within 30 days.

While the Republican-controlled Congress has not moved forward with that legislation, Reed notes the Trump Administration can still crack down on fraud simply be enforcing existing law but notes the Trump Administration seems to be more focused on aiding special interests and billionaires instead of working people.

In 2019, the U.S. Treasury Department issued guidance clarifying that crypto ATM operators must register and adhere to the same Anti-Money Laundering (AML) rules that apply to banks. However, there are high rates of non-compliance: According to a 2021 investigation, more than one-third of crypto ATM companies operating in New Jersey had failed to register at the federal level.

“Instead of allowing consumers to continue getting scammed at record levels, the Trump Administration should help combat fraudulent activity tied to crypto ATMs and Congress should strengthen and improve oversight,” said Reed.

The U.S. Federal Trade Commission (FTC) has reported that, in 2024, cryptocurrency accounted for 33 percent of losses worth at least $10,000 reported by older people subjected to scams.

The FTC, and FBI urge victims of fraud to contact local law enforcement and the kiosk operator; file federal complaints at reportfraud.ftc.gov; and to save crypto ATM receipts, wallet addresses, QR codes, transaction hashes, communications, and the location of the crypto ATM they accessed to help investigators. However, there is no guarantee of recovery.

Senator Reed has simple advice for anyone who receives a call, text, or e mail directing them to rush to a crypto ATM to make a payment: Don’t do it! It. Is. A. Scam. Call someone you trust instead and ask for assistance.

To learn more, visit Senator Reed’s scam prevention page: https://www.reed.senate.gov/seniorscams