![]() Since they allow customers to convert cash to bitcoin with little friction, bitcoin ATMs can also be used to facilitate a variety of ordinary crimes, such as illegal drug and weapons sales or purchases of stolen goods. The scammers would then ask for personal information tell victims to purchase bitcoin at an ATM to send it to an address, purportedly owned by PayPal (but really owned by the scammer) in order to rebalance their account. In November 2021, Pennsylvania state police warned citizens about a bitcoin scam involving scammers sending texts claiming to be from PayPal regarding false charges on their account. “Since they allow customers to convert cash to bitcoin with little friction, bitcoin ATMs can be used to facilitate a variety of ordinary crimes, such as illegal drug and weapons sales or purchases of stolen goods.” This way, the bitcoin will be sent not to the customer’s crypto wallet, but instead sent to the criminal’s wallet. In many cases, scammers will direct a victim to use a specific QR code associated with the criminal’s wallet, instead of the user’s own QR code. Bitcoin ATMs are no different in their ability to be utilized by criminals, particularly online scammers. Many have decried cryptocurrencies like bitcoin for their ability to facilitate fraud, crime, and other illicit activities. Bitcoin ATM Machines Can Facilitate Fraud and Cybercrime Therefore, in general, no U.S.-based bitcoin ATMs allow transactions of more than $9,999, with most machines setting limits far, far lower. This law mandates that banks and other financial institutions show regulatory documentation whenever customers attempt to deposit $10,000 or more. They must also follow each of the AML (anti-money laundering) clauses of the Bank Secrecy Act (BSA) of 1970. In addition, U.S.-based bitcoin machine operators are required to officially register with the Financial Crimes Enforcement Network (FinCEN). For this reason, most U.S.-based bitcoin ATMs have strict lower and upper thresholds regarding how much cash can be converted to bitcoin per transaction. This is particularly the case in the United States, which has a wide variety of laws regarding banking and money transfers. While online bitcoin users benefit from a lot of anonymity and very high limits on transaction sizes, the users of bitcoin ATM machines aren’t so lucky.
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