An investigation has revealed a troubling trend in North Carolina, where Bitcoin ATMs have become a popular tool for scammers, causing consumers to lose significant amounts of money. In collaboration with ABC News, the ITEAM has uncovered that these kiosks, now present across the Triangle and beyond, are embroiled in fraudulent activities, with Americans losing nearly $250 million in 2024 alone—more than double the losses from the previous year, according to the FBI.
The AARP has alerted its vast membership base about the rising threat posed by Bitcoin ATMs. One victim, Pamela Mangum from Durham, recounted her harrowing experience of losing over $70,000 to a scam that began when she was approached by someone claiming to be her “investment coach.” Unfamiliar with the concept of a Bitcoin ATM, she was led to believe that inserting cash into the machine would lead to significant financial returns. As she described, “You have to insert cash into that machine, and she would tell me how much cash I had to insert to get to the next level – to continue earning money.” After several transactions, it became clear to her that she had fallen victim to an elaborate scam.
Amy Nofziger, with the AARP Fraud Watch Network, highlighted the magnitude of the problem, noting that there are currently around 45,000 cryptocurrency ATMs in the U.S. Victims reach out to the organization daily, reporting similar scams. Nofziger explained that criminals continuously seek new methods to deceive individuals, and Bitcoin ATMs are now a favored avenue for them.
Throughout this process, Adam Zarazinski, CEO of Inca Digital, has elucidated how these scammers operate. Victims are instructed to insert cash into a Bitcoin ATM and transfer the equivalent amount in Bitcoin or other cryptocurrencies to a specified wallet address. Typically, this involves scanning a QR code linked to that address. Zarazinski emphasized the profitability of these transactions, noting that businesses hosting Bitcoin ATMs often earn a significant commission on each transaction—anywhere between five and 25 percent.
The problem is further exacerbated by the involvement of transnational crime groups, turning this situation into a multi-billion-dollar industry that preys on ordinary Americans and launders the stolen money overseas. In response to the growing number of scams, North Carolina officials, including Attorney General Jeff Jackson and Secretary of State Elaine Marshall, have initiated a state-led effort to combat cryptocurrency and Bitcoin ATM fraud. There’s a push from the AARP for implementing stricter consumer protections, such as imposing daily transaction limits to safeguard users.
Nofziger pointed out, “We want these ATMs to have the same safeguards as other financial tools,” suggesting measures such as limiting new customers to a maximum of $1,000 per day. Once cash is deposited into a Bitcoin ATM, recovering the funds becomes extremely challenging.
In a similar case, another Durham woman reported losing nearly $24,000 after being convinced by a scammer that fictitious fraud charges existed on her account.
To avoid falling prey to such scams, experts recommend exercising caution with unsolicited messages or calls. They advise individuals not to rush decisions in response to created urgency, consulting with trusted contacts before sending any money, and contacting law enforcement if anything seems suspicious.
