PHOENIX — Cryptocurrency kiosks are popping up in gas stations, convenience stores and smoke shops across Arizona.
These crypto ATMs look like regular ATMs but are used to convert cash into cryptocurrency.
Scammers are using them to steal millions of dollars from older adults, prompting lawmakers to pass new legislation to help stop the fraud.
“I’ve never seen it as bad as it currently is,” said Dana Marie-Kennedy, state director of AARP Arizona.
Arizona law enforcement can barely keep up with the growing problem. “We’re seeing elderly folks being lured down to ATM cryptocurrency, ATM machines, and being asked by scammers to put $50,000 into the (Bitcoin ATM machine),” said Arizona Attorney General Kris Mayes.
Once the money is sent, it’s nearly impossible to recover. “It’s very hard to trace, and basically, it’s gone,” Mayes said.
Criminals are using crypto ATMs to lure victims into sending hundreds of millions of dollars through investment schemes, romance scams and failure-to-pay scams.
New law targets crypto ATM fraud
In May, Arizona lawmakers passed a bill mandating requirements for cryptocurrency ATMs or kiosks.
The law is enforced by Attorney General Mayes while the Arizona Department of Insurance and Financial Institutions oversees licensing, regulations, and compliance.
According to AARP Arizona, fraud losses at crypto ATMs have increased nearly 10-fold from 2020 to 2023, with victims losing an average of $10,000. The organization is now using maps to help track these scams.
“You can actually zone in on where this is happening and that allows us to get the word out to that this is happening rapidly in your community,” Marie-Kennedy said.
Arizona’s Cryptocurrency Kiosk License Fraud Prevention Law is set to go into effect September 26.
Key provisions of the new law
Under the law, several new protections will be in place:
Kiosk and ATM operators must issue full refunds, including fees, to new customers who have been fraudulently induced to engage in a crypto ATM transaction
Warning messages must be displayed on the screen and customers must acknowledge them before proceeding with transactions
Daily transaction limits are now set at $2,000 per day for new customers and $10,500 for existing customers
However, Attorney General Mayes admits she’s not fully satisfied with the regulations.
“Honestly, I would like to see tighter controls on how much money anybody can send through cryptocurrency, and especially (cryptocurrency ATM machines),” Mayes said.
Law enforcement and advocates like AARP Arizona, say the new law is a step in the right direction. Mayes says she’ll keep pushing for legislation to stop scammers from stealing from older Arizonans.
“I will tell you, when you talk to any sheriff or police chief in the state of Arizona, they are seeing so much of this happening, and it is crushing,” Mayes said.
I sat down with the Financial Crimes Unit with Scottsdale Police, an area that has seen crypto ATM scams skyrocket. They share what’s being done to help with the problem and the technology being used to track stolen cryptocurrency.
*This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.*
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