Crypto ATMs are emerging as a concern for regulators as scammers increasingly use the machines to move illicit funds.
A report submitted by the US Department of the Treasury to Congress under the GENIUS Act warns that digital asset kiosks are becoming a preferred tool for fraud schemes.
These machines allow users to convert cash into cryptocurrency within minutes, making them attractive to criminals seeking fast transactions.
Authorities say scammers exploit the speed and convenience of these kiosks to pressure victims into transferring funds.
The findings come as lawmakers debate new rules for digital assets while trying to limit fraud and illicit finance.
Scams through crypto ATMs
The Treasury report highlights how digital asset kiosks have become a common channel for financial scams.
Crypto ATMs allow users to deposit cash and convert it into digital currencies such as Bitcoin.
Because transactions are difficult to reverse, criminals are using these machines to collect payments from victims.
Limited oversight around some machines makes them attractive for fraudulent activity.
According to data cited in the report, the FBI received more than 10,900 complaints related to crypto ATM scams in 2024.
Total reported losses reached roughly $246.7 million during the year.
Officials say scammers instruct victims to visit a nearby machine, deposit cash and send cryptocurrency to wallet addresses controlled by fraudsters.
Common fraud tactics
Treasury officials say criminals rely heavily on impersonation schemes and fake investment opportunities when directing victims to crypto ATMs.
Fraudsters often pose as government officials, company representatives, or financial advisers.
Victims may be told that funds must be transferred immediately to resolve a legal issue or protect their savings.
Investment scams also appear frequently.
Individuals are persuaded that they can earn high returns through cryptocurrency trading opportunities and are asked to deposit cash through kiosks.
The report notes that older individuals are disproportionately targeted in these schemes.
Authorities say the pattern reflects broader financial fraud trends where scammers target individuals less familiar with digital asset technology.
Risks beyond ATMs
The Treasury report also highlights other digital asset technologies that could be exploited for illicit finance.
Transaction mixers, decentralised finance protocols, and cross-chain bridges were identified as tools that may obscure the movement of stolen cryptocurrency across networks.
These systems can allow funds to be transferred between blockchains or blended with other transactions, making it harder for investigators to track where the money originated.
Regulators say monitoring these technologies will be important as digital asset markets continue to grow.
Technology for detection
Despite the risks, the Treasury also pointed to technologies that could strengthen financial crime detection.
Artificial intelligence systems, blockchain analytics tools, digital identity solutions, and application programming interfaces could improve how financial institutions identify suspicious activity.
These technologies may help track digital asset movements and flag unusual transaction patterns.
While preparing the report, the Treasury reviewed more than 220 public comments from industry participants and technology providers.
Officials emphasised regulators should adopt a technology-neutral approach, allowing financial institutions to choose compliance tools based on their risk profiles.
The findings arrive as US lawmakers continue debating digital asset oversight under the GENIUS Act, which aims to support financial innovation while strengthening protections against illicit finance.
The post US Treasury warns crypto ATMs becoming hub for digital asset scams appeared first on Invezz
