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FTC Issues Warning Against Scams Involving Crypto ATMs

source-logo  blockster.com 13 January 2022 09:54, UTC

According to a blog post, the FTC noted that there were scammers who have devised a method to deceive people into parting with their cryptocurrency assets. The agency stated that the scam tactics comprised an impersonator, a QR coded, and a crypto ATM for victims to deposit funds.

Detailing the method of operation, the FTC said that the fraudster called the intended target, posing as a government official, an employee in a utility company or a law enforcement agent. Sometimes, the impostor could even call to say that the individual won some lottery prize money.

Whichever persona that is adopted, the fraudster would ask the victim to send money. If the target falls for the fake story being told, that enables the scammer to keep up with their game.

While the person is still on the phone, the fraudster asks the individual to withdraw money and proceed to deposit the fund in a cryptocurrency ATM to buy crypto via ATM. At this stage, the QR code is introduced, whereby the scammers send the unsuspecting victim a QR code containing their address.

If the individual scans the code, all the purchased crypto asset transfers (unknown to the victim) to the fraudster.

Meanwhile, the FTC warned the public to be vigilant, and be wary of anyone who sends unsolicited messages. According to a statement from the agency:

The FTC, back in May 2021, reported that it received more complaints from over 7,000 investors who lost more than $80 million between October 2020 and March 2021, to cryptocurrency scams. According to the consumer protection agency, these reports were twelve times more than what was reported within the same period the previous year.

Also, a recent January article by the blockchain forensic firm Chainalysis, crypto-based crime saw scammers receiving $14 billion worth of cryptocurrency in 2022, which was nearly double of what was sent to illicit addresses in 2021.

Furthermore, the report stated that the scam formed the largest type of crypto-based crimes by transaction volume. About $7.8 billion were stolen from victims, with the scam revenue rising 82% in 2021.

As cryptocurrency continues to see exponential growth, more bad actors devise means to steal from unsophisticated investors. Sometimes, the fear of missing out (FOMO) makes individuals susceptible to these criminals. However, investors are advised to be careful, as these rogue actors continue to evolve in their method of scam.