FBI warns of increased Bitcoin (BTC) ATM fraud

Sat 06 Nov 2021 ▪ 9h38 ▪ 4 min read — by Rudy Bauer

The Federal Bureau of Investigation (FBI), the United States’ domestic intelligence and security department, has released its findings on fraudulent schemes associated with Bitcoin ATMs and QR codes.

Scammers on the rise

According to an FBI public service announcement, there has recently been a significant increase in fraudsters encouraging victims to use cryptocurrencies and QR codes to make payments. A person can scan the QR code of the intended recipient of the money to automatically fill in a field with their details, making it easier to send cryptocurrencies. Because of the pandemic, many companies have adopted this method of payment and settlement, which is being exploited by perpetrators.

When communicating with victims, scammers pretend to be someone they know, law enforcement agencies or public utilities. Often, users of online dating sites or lottery ticket holders fall for the scammers’ tricks – the perpetrators convince them that they have won a big prize but need to pay “lottery fees” in order to claim it. Scammers are usually in constant contact with the victim, instructing them step by step before completing the payment.

Criminals provide victims with a QR code linked to their cryptocurrency wallet for a person to use during a transaction. They then direct the user to a crypto machine, ask them to buy the cryptocurrencies and apply the QR code provided to fill in the recipient’s address automatically. In reality, the cryptocurrencies go to the address of the scammers, not to the organisation or friend with whom the scammed person was purportedly communicating.

“Cryptocurrency’s decentralized nature creates challenges that makes it difficult to recover. Once a victim makes the payment, the recipient instantly owns the cryptocurrency, and often immediately transfers the funds into an account overseas. This differs from traditional bank transfers or wires where a payment transaction can remain pending for one to two days before settlement,” the Federal Bureau of Investigation reported.

FBI guidelines for crypto service users

The FBI has urged the public to be cautious not to send cryptocurrencies or regular money to people they have met online. It is not a good idea to communicate with a “representative” of any firm requesting personal information – it is better to contact the organisation directly through its official channels of communication. In addition, the FBI recommends not following any instructions for scanning a QR code to send funds via cryptocurrency ATMs. According to the FBI, many crypto teller machines do not comply with US federal laws and can be used for money laundering.

The more the industry develops, the more unscrupulous individuals want to cash in on gullible users, so you have to be vigilant at all times. As you may recall, the FBI reported in April that phishing attacks to steal digital assets increased 20-fold in 2020 compared to 2018 due to the coronavirus pandemic.

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Rudy Bauer avatar
Rudy Bauer

Photographe, Vidéaste, webdesigner et enfin rédacteur pour CoinTribune: l'image, le digital et la blockchain sont mon dada.


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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