Bitcoin ATMs proliferate despite criminal risk

The number of crypto ATMs is surging around the globe, according to new data from Coin ATM Radar, despite increased concerns about their misuse by criminals.

Bitcoin kiosks are popular targets for criminals due to the anonymity of transactions and their use in money laundering, drug trafficking, and other crimes.

“The FBI has seen an increase in scammers directing victims to use physical cryptocurrency ATMs and digital QR codes to complete payment transactions,” the FBI said.

In the last six months, more than 2,500 crypto ATMs have been installed, Coin ATM Radar data reveals. These bitcoin ATMs are ubiquitous in retail stores, appearing everywhere from Walmart to Circle K in the United States.

Bitcoin remains the top crypto used in crypto ATM transactions, followed by Bitcoin Cash and ether, the world’s second-largest cryptocurrency.

Minnesota and Vermont have both passed legislation this year regulating crypto ATMs. Vermont now requires ATM operators to register with regulators, and limits crypto ATMs transactions to $1,000 per day. Additionally, Vermont has also imposed a temporary moratorium on new bitcoin ATM installations until next summer.

Similarly, Minnesota's new law limits daily transactions to $2,000 for new customers and requires ATM operators to adequately warn customers about the risks of fraud. It also permits refunds for fraudulent bitcoin ATM transactions, a move that will help victims of bitcoin ATM scams. Similar legislation is in the works in Rhode Island.

Over 80% of crypto ATMs are sited in the United States, though there is a burgeoning market for crypto ATMs in Canada, Spain, El Salvador, Germany, and Hong Kong, jurisdictions where crypto adoption is increasing.

Globally, there has been an 18% increase in crypto ATM installations, responsible for adding more than 38,000 ATMs worldwide during the past year. However, more than 2,800 crypto ATM machines were pulled offline last year, partly due to their link to criminal activity.