Over 80% of the world’s bitcoin ATMs are located in the United States, with an alarming concentration in Black, Latino, and lower-income communities. This situation mirrors the historical presence of payday lenders and check-cashing services in these areas, raising serious concerns about financial equity and accessibility.
In a recent opinion piece for the Financial Times, Dedrick Asante-Muhammad, president of the Joint Center for Political and Economic Studies, discussed how ATM providers have denied deliberately targeting communities based on racial demographics. However, the strikingly disproportionate placement of these machines suggests a troubling trend that is gaining recognition.
Adding to the unease, an April report from the FBI revealed a staggering 10,956 complaints related to bitcoin ATMs in 2024, which represents a 99% increase from the previous year. This surge coincides with a notable rise in cryptocurrency-related fraud, with losses totaling at least $9.3 billion in 2024—up 66% from 2023. The fraud linked to these ATMs includes investment scams, extortion, and other illicit activities.
Asante-Muhammad pointed out that the operational structure of bitcoin ATMs contributes to the risks faced by consumers in these neighborhoods. Primarily designed for one-way transactions, these machines allow users to exchange cash for bitcoin but do not facilitate the conversion back into dollars. This one-way functionality effectively locks consumers into a volatile market without recourse.
Despite the outlined dangers, there are concerning gaps in the recent cryptocurrency legislation, which fails to implement necessary consumer protections related to bitcoin ATMs. In an effort to safeguard customers, Brandon Mintz, CEO of Bitcoin Depot, the largest bitcoin ATM operator, urged consumers to exercise caution. He advised that individuals should never send their cryptocurrencies to unknown wallets or individuals and remain skeptical of requests for urgent payments, particularly under questionable circumstances.
Globally, regulatory action has begun to emerge in response to the increasing misuse of bitcoin ATMs. The U.S. Federal Trade Commission (FTC) previously labeled these machines as a “payment portal for scammers,” citing substantial losses linked to scams—rising dramatically from $12 million in 2020 to $114 million by 2023. Notably, this figure likely represents only a fraction of the actual losses, as many scams go unreported.
In light of these concerns, New Zealand’s government has recently called for a ban on crypto ATMs, with associate justice minister Nicole McKee stating that such measures would hinder criminals’ ability to convert cash into high-risk cryptocurrencies.
The growing scrutiny over the placement and use of bitcoin ATMs highlights the urgent need for responsible regulation and increased consumer awareness to protect vulnerable communities from financial exploitation.
