![Rising Fraud Scammers Use Unregulated Bitcoin ATMs to Steal Millions](https://commercedigest.net/wp-content/uploads/2025/01/Rising-Fraud-Scammers-Use-Unregulated-Bitcoin-ATMs-to-Steal-Millions-1024x512.jpg)
Bitcoin ATMs are showing up in convenience stores, grocery stores, smoke shops, and gas stations more frequently. Texas had about 1,000 cryptocurrency ATMs five years ago.
There are over 4,000 now. The devices provide a safe and simple way to purchase cryptocurrencies, but convenience comes at a cost.
Bitcoin ATMs are showing up in convenience stores, grocery stores, smoke shops, and gas stations more frequently. Texas had about 1,000 cryptocurrency ATMs five years ago.
There are over 4,000 now. The devices provide a safe and simple way to purchase cryptocurrencies, but convenience comes at a cost.
One such victim was 80-year-old Joseph Buentello. A desperate phone call informed him that his son had been arrested and that $5,000 was required for legal bills.
According to Buentello, the caller told him to take the money out of his bank account and put it into a Bitcoin ATM at his neighborhood supermarket.
After following the directions, Buentello discovered that he had been duped. The funds were immediately transferred to a cryptocurrency wallet and converted to Bitcoin, rendering them irretrievably lost.
“I was scared,” admitted Buentello, who had never heard of a Bitcoin ATM before. “I hit the panic button and I let my panic take control of my good judgment.”
Bitcoin ATM operator Coinme said in a statement regarding the Buentello issue, “Our customer service team is dedicated to supporting scam victims, but in cases like this, transactions are instantly sent outside of Coinme’s platform, making the funds unrecoverable.”
![Rising Fraud Scammers Use Unregulated Bitcoin ATMs to Steal Millions](https://commercedigest.net/wp-content/uploads/2025/01/Rising-Fraud-Scammers-Use-Unregulated-Bitcoin-ATMs-to-Steal-Millions-1.jpg)
The Bitcoin ATMs are private, self-service transactions, according to Tom Thumb, the grocery company that is hosting them. Coinme and Tom Thumb observed that the kiosk had several fraud warning panels.
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Restrictions pertaining to law enforcement
Dealing with these crimes presents difficulties for law enforcement. The McLennan County Sheriff’s Office once took money straight out of a Bitcoin ATM and gave it back to an 83-year-old scam victim. The Bitcoin ATM operator, however, filed a lawsuit against the sheriff’s office, arguing that the seizure was illegal.
After the county acknowledged that the money was mistakenly seized and that the Bitcoin ATM operator was the rightful owner, the lawsuit was eventually abandoned and the woman was permitted to keep the money.
Sheriff Parnell McNamara of McLennan County stated that he has no regrets about the way his agency handled the matter, even in light of the lawsuit.
Operators of Bitcoin ATMs assert that they take numerous precautions against fraud, such as showing up to six fraud warning screens before to any transaction. Former business insiders contend that these cautions are insufficient, nevertheless.
Possible Solutions
A few states, notably Minnesota, Vermont, and California, have enacted legislation governing Bitcoin ATMs in recent years. Nonetheless, Texas and the majority of the nation are unregulated.
The problem has been noted by Illinois U.S. Senator Dick Durbin. He wrote to the top ten Bitcoin ATM providers last October to inquire about their efforts to prevent scams.
Their answers were “not reassuring” to him. Durbin intends to propose federal legislation that would impose 72-hour waits on all transactions for new users and cap the maximum amount that can be deposited into a Bitcoin ATM.
A number of Bitcoin ATM owners expressed their excitement in collaborating with legislators to create consumer protection laws.
The Texas Blockchain Council, a state lobbying group for the cryptocurrency sector, stated that while they would back laws that would rid the market of corrupt actors, “banning crypto ATMs altogether is not a very ‘Texan’ thing to do.”