FTC issues public warning over new crypto ATM scam

The U.S. Federal Trade Commission is reminding everyone to be wary of new payment scams involving imposters and crypto ATMs.

The U.S. Federal Trade Commission (FTC) has issued a warning about a new version of a scam involving cryptocurrencies. The scam has three key components, an impostor, a QR code and an encrypted ATM through which victims will be directed to send funds.

Scammers often pose as public officials, law enforcement officials, or employees of local utility companies, according to the FTC. The impostors also use dating apps, pretending to be potential romantic partners or calling victims to announce their winnings.

No matter how you start, it always ends with scammers asking for your money. If a user is deceived, the scammer will ask them to withdraw some cash and then go to a crypto ATM. After that, they will ask to buy cryptocurrencies through this crypto ATM. Here, QR codes come into play. They share the QR code of their wallet address with the victim. Therefore, once the victim scans the QR code, the purchased crypto assets are transferred to the scammer’s account.

Cristina Miranda of the FTC's Division of Consumer and Business Education explained:

“The main thing to know is this: Governments, law enforcement, utilities or awards promoters won’t let you pay them in cryptocurrency. If anyone does, it’s a scam, no exceptions.”

Meanwhile, a cryptocurrency crime report revealed that $7.7 billion worth of cryptocurrency will be stolen globally in 2021. Compared to 2020, this number has increased by 81%.