In the first two months of Q3 2024, over 600 Bitcoin ATMs were taken offline worldwide, with the United States accounting for the majority of shutdowns. This wave of closures coincides with increased efforts by law enforcement agencies to tackle the misuse of these ATMs, which are frequently linked to extortion and scams.
Rising Shutdowns and Global Impact
According to Coin ATM Radar, the global Bitcoin ATM network shrank by 435 machines in July and another 182 in August, bringing the total loss to 617 ATMs. The United States alone saw the removal of 411 machines in July, followed by 258 in August, highlighting the country’s leading role in these closures.
The shutdowns reflect growing concerns about the misuse of Bitcoin ATMs, particularly as they are increasingly linked to fraud schemes. On August 7, a government committee in Chico, California, discussed measures to better regulate Bitcoin ATMs. Andy Pickett, the chief administrative officer of Butte County, suggested that these machines should be governed more like traditional banks to reduce criminal activities.
Bitcoin ATM Scams Surge
The United States Federal Trade Commission (FTC) has reported a tenfold rise in Bitcoin ATM scams since 2020. These scams are often tied to the anonymous and fast-paced nature of cryptocurrency transactions. Fraudsters persuade victims to transfer funds through Bitcoin ATMs by making false promises or misrepresentations.
FTC data reveals that Bitcoin ATM-related scams resulted in losses exceeding $110 million in 2023. Victims aged 60 and older are particularly vulnerable, being three times more likely to be targeted in these schemes.
To mitigate the risks, some ATM operators have started taking preventive measures. Bitcoin Depot, which manages 8,512 ATMs globally, claims to display scam warnings on its kiosks and uses screen prompts to alert users about potential fraud.
Global Crackdown on Crypto ATMs
Law enforcement efforts to curb illegal activities through Bitcoin ATMs are gaining momentum across multiple jurisdictions. In Germany, for instance, the Federal Financial Supervisory Authority (BaFin) initiated a crackdown on August 20, seizing 13 crypto ATMs from 35 locations. German authorities expressed concerns that crypto ATMs could be used for money laundering and other criminal activities if proper Know Your Customer (KYC) regulations are not enforced for transactions exceeding €10,000.
In Singapore, authorities have gone even further by banning Bitcoin ATMs altogether. This is part of a larger initiative by the Monetary Authority of Singapore to regulate the advertising of cryptocurrencies to the general public.
The Global Bitcoin ATM Network
As of September 5, 2024, approximately 38,790 crypto ATMs are operational worldwide, according to Coin ATM Radar. The United States and Canada together account for 91% of these machines. Notably, the top 10 operators manage around 28,691 ATMs, representing 74% of the total network. Bitcoin Depot is the largest operator, running 21.9% of all crypto ATMs globally.
While Bitcoin ATMs provide easy access to cryptocurrency, the growing wave of scams and legal crackdowns indicates that stricter regulations and safeguards may be necessary to ensure the long-term viability of these machines.
