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Initially implemented by operators with the seemingly altruistic goal of financial inclusion, cash-to-cryptocurrency ATMs — now commonplace in your local gas station or grocery store — have been increasingly entangled in organized crime, fraud and exploitation. These machines disproportionately harm technologically vulnerable groups like the elderly, immigrants and individuals with limited tech literacy, and are difficult for law enforcement to oversee.
The predominant feature of crypto ATMs is their ability to convert physical currency into digital assets, like crypto, almost instantly, often without extensive identity verification.By using crypto ATMs, users can bypass the layers of authentication that traditional financial institutions require, a convenience that is emphasized by kiosk operators. Banks would ask for government-issued identification, account verification and transaction monitoring, while crypto ATMs only require a phone number.
Crypto ATMs are not a fringe technology. Over 30,000 crypto ATMs are located across the United States. Usually, they are placed in high-traffic and low-regulation environments such as gas stations and grocery stores. Their prevalence in everyday retail spaces makes them feel more legit than digital platforms to new crypto investors, making them perfect for scammers to utilize.
Consumer protection and law enforcement agencies report losses rising sharply each year through these kiosks. The FBI reports that during the fiscal year of 2025, more than $333 million was stolen through cryptocurrency kiosks. When a financial tool is consistently appearing in fraud reports nationwide, the damages can no longer be treated as isolated misuse incidents.
Crypto ATMs should be entirely proscribed due to the extremely high incidence of scams, the risk of money laundering and the lack of legitimate advantage to their use.
The most considerable downfall of these kiosks is that transactions are both irreversible and untraceable. Once the funds are sent, recovery is virtually impossible, particularly because they lack the consumer protection and tracking systems that banks and credit unions have. Crypto ATMs are “streamlined” by doing away with the lengthy verification and daily limits that bank users go through.
As companies utilize artificial intelligence to adapt their platforms to technical breaches, financial fraudsters are starting to rely more on social engineering as the pillar for their scams. They impersonate government officials, bank representatives or technology support workers, manipulating victims into believing that immediate action is required and instructing them to deposit cash into a crypto ATM.
Even when law enforcement can identify the wallet receiving funds, the decentralized networks and international exchanges make tracing the assets nearly impossible. Consequently, the victims — more often than not, older adults born before the widespread adoption of technology — lose large amounts of money with no recourse.
An 86-year-old woman was found depositing thousands of dollars from her life savings into a crypto ATM, on the phone with who she thought was a representative from the “security team” of her bank.
There are functional benefits to a service that allows the conversion of cash to cryptocurrency without the use of a bank or mobile third party. When these kiosks were first put out, they were widely seen as a step towards financial inclusion. However, these ATMs still require disposable cash, knowledge of their technicalities and access to a digital wallet to claim purchased cryptocurrency after the transaction is conducted. Considering that the initial target audience of the kiosks was supposed to be those who do not have access to digital wallets or possess financial and technical literacy, they typically cannot meet the criteria to properly track and claim the cryptocurrency.
On top of this, the ATMs charge high fees for service: between 5-15% per transaction. Since their launch, crypto developers have produced cheaper and safer options. Digital on-ramps — services that are used to convert cash or bank funds into crypto through regulated platforms — like Coinme Cash, integrated wallet services and P2P platforms provide all the asserted benefits of crypto kiosks, with extra layers of security and protection.
Between the high risk for financial crimes and the emerging better alternatives, digital asset kiosks lack a legitimate advantage or social utility. Completely mitigating the adverse effects of crypto ATMs would require conducting a government-induced nationwide ban. Ideally, federal or local lawmakers would outlaw them entirely, due to their roles in enabling fraud and money laundering.
But there are a multitude of versions and companies in the crypto kiosk sector, indicating little efforts to ban them. Until then, the cryptocurrency consumer — or any digital member — can better inform themselves about the new and evolving strategies that cryptocurrency kiosk scammers are using to prevent successful cybercrime. Staying up to date on the latest reports of digital financial crimes, researching crypto platforms before investing, keeping personal information private and verifying any and all online asks for cash deposits are the most effective ways to protect oneself from crypto scam schemes.
Stephanie Bouserhal is an Opinion Columnist who writes about cryptocurrency in her column “Crypto Critiques.” She can be reached at scbous@umich.edu.