Bitcoin ATMs are seeing a significant reduction worldwide, with over 600 machines shut down in the first two months of Q3 2024. The United States has led this decline, losing 411 ATMs in July and another 258 in August. This reduction is part of a larger global effort to regulate cryptocurrency ATMs, which have become increasingly linked to criminal activities such as scams and extortion. Regulatory authorities are focusing on these machines because of their potential to facilitate illicit financial activities. Data from Coin ATM Radar shows a steep drop in the number of active Bitcoin ATMs globally, with 435 machines going offline in July and another 182 in August. The U.S. accounts for the majority of these losses, making up a significant portion of the global reduction.
Bitcoin ATMs were originally designed to make cryptocurrency more accessible to the public, but they have now become a prime target for scammers. In the U.S., the rise of fraudulent schemes involving these machines has prompted increased scrutiny from regulatory bodies. The Federal Trade Commission (FTC) has reported a sharp increase in scams using Bitcoin ATMs, particularly targeting older individuals. Since 2020, scams involving Bitcoin ATMs have grown tenfold, with fraudsters exploiting the anonymity and speed of cryptocurrency transactions to deceive victims into sending them money. In 2023 alone, more than $110 million was lost to such scams, with seniors aged 60 and older being three times more likely to be affected compared to younger individuals.
These scams often involve convincing victims that they owe money due to some error, such as an overpayment. Scammers then instruct the victims to use a Bitcoin ATM to send funds under the guise of rectifying the situation. Once the money is deposited into the machine, it is instantly converted into digital currency and transferred to the scammers, often to accounts located overseas, making it nearly impossible to recover the funds. A recent case in Michigan involved a woman who lost almost $5,000 after being tricked into using a Bitcoin ATM and purchasing gift cards for the scammers. Similar cases are becoming more common, with the FBI reporting over 2,000 complaints related to crypto ATMs in 2023, mostly from older individuals.
The crackdown on Bitcoin ATMs isn’t limited to the United States. In Germany, authorities have taken action to regulate these machines more strictly. On August 20, the Federal Financial Supervisory Authority (BaFin) seized 13 crypto ATMs from 35 different locations. Germany is concerned that without proper Know Your Customer (KYC) controls, these machines could be used for illegal transactions, particularly for sums exceeding 10,000 euros. Singapore has gone even further, with the Monetary Authority of Singapore (MAS) banning crypto ATMs entirely as part of its broader regulatory framework for cryptocurrencies. These moves show that countries around the world are increasingly wary of the risks posed by Bitcoin ATMs and are taking steps to mitigate them.
Globally, the Bitcoin ATM market remains concentrated in a few regions. There are currently about 38,790 Bitcoin ATMs in operation, with the U.S. and Canada together accounting for around 91% of the global network. The top 10 operators control 28,691 of these machines, which is about 74% of the total market. Despite the ongoing crackdowns, some countries like Australia are continuing to expand their Bitcoin ATM networks, recently surpassing the milestone of 1,000 machines. As more governments regulate these machines, the future of Bitcoin ATMs remains uncertain, and the industry will likely continue to evolve in response to tightening regulations.
