Depositors beware: Crypto ATMs are the newest way to scam you

Older Australians, who have traditionally had large targets on their backs for scammers, are now disproportionately falling prey to the growing industry of cryptocurrency ATM fraud.

When someone with grey hair lines up at a mall or petrol station next to a small, weird-looking machine that resembles a cross between a Chubb safe and a monochrome ATM, alarm bells should sound.

Crypto ATMs are becoming a trap for older Australians targeted by scammers.Credit: Aresna Villanueva

Six years ago, you would have needed to scour the landscape to find a crypto ATM, given there were only 23 in Australia. But they are now popping up like mushrooms. More than 1800 operate across the country today.

To put that into perspective, that is the same number of ATMs owned and operated by the Commonwealth Bank and twice the number of those branded as National Australia Bank or ANZ.

Turns out we are the third-largest host to crypto ATMs globally after the US and Canada.

The federal police and the financial crimes agency AUSTRAC have called out $3 million lost to scammers via crypto ATMs in a year, but they admit the real amounts are a multiple of this. The AFP describes the amount of money it knows about as the tip of the iceberg.

And the problem is approaching epidemic proportions.

In 2024, ReportCyber – Australia’s online cybercrime reporting system operated by the Australian Cyber Security Centre – received the equivalent of one reported scam every 2½ days, each with an average loss of more than $20,000.

This metric is conservative, given that often the crimes go unrecorded because the victims don’t know how to report the crime or are too embarrassed about being duped.

It isn’t just the older cohort’s lack of digital savvy that has rendered them vulnerable to digital fraud. It’s the fact they have savings and are more likely to become victims of trust.

‘I would warn anybody who is asked to use one of these [crypto ATM] machines to send funds to someone to stop and think twice, as once your money is gone it is almost impossible for authorities to retrieve it.’

AUSTRAC chief Brendan Thomas

The allure of speculative investments like crypto clearly plays a part in attracting people to this type of asset. But according to an expert from Swinburne University,  Dimitrios Salampasis, older people can be under the illusion they are helping a loved one, or they may be paying a false debt or investing in a fake opportunity.

It is those aged 60 or above who are targeted, and too many are taking the bait, putting cash into the crypto ATMs to convert into crypto for their digital wallets, which in turn may be used to make payments to scammers.

AUSTRAC CEO Brendan Thomas said that over several months the taskforce had observed customer activity that bore the hallmarks of scams and other illicit dealings.

The agency has already refused to renew one crypto ATM operator’s registration and placed a $5000 limit on cash deposits and withdrawals.

The ATMs can be merely the conduit used to funnel funds. For example, a scammer may ask the victim to transfer funds for any number of ruses, including romance scams, too-good-to-be-true investment opportunities, utility payment cons, fake tech support or job scams.

Unsurprisingly, organised crime lurks in the background of these scams, which are said to be globally based. The inability to trace crypto funds makes crypto particularly popular with those scammers, while also making recovery of lost money near impossible.

“Crypto can be a high-risk investment, but people who consider and are willing to accept those risks may find them a convenient vehicle for investment,” says AUSTRAC’s Thomas.

“However, I would warn anybody who is asked to use one of these machines to send funds to someone to stop and think twice, as once your money is gone it is almost impossible for authorities to retrieve it.”

AUSTRAC will also enforce enhanced customer due-diligence requirements, mandatory scam warnings and more robust transaction monitoring obligations on the ATM operators.

But older Australians in particular can be emotionally vulnerable and lacking technical savvy, making them ripe for this kind of exploitation.

With limited redress, it becomes a case of “depositor beware”.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.