5 THINGS TO KNOW: How to spot and avoid Bitcoin ATM and other cryptocurrency scams

Oklahoma Attorney General Gentner Drummond gives warning about a rise in scams involving Bitcoin ATMs that are leaving Oklahomans with a depleted bank account.

1 What are Bitcoin ATMs?

“Bitcoin ATMs” are virtual currency kiosks located in grocery stores, gas stations and malls. They look like traditional ATMs but they allow individuals to purchase and send virtual currencies such as Bitcoin, Ethereum and Tether. Scammers use a variety of tactics to convince victims, who are often elderly, to withdraw money from their bank account and deposit it into an unregulated, virtual currency kiosk.

2 What is one method scammers are using?

One method currently being used in Oklahoma involves scammers convincing an individual that their bank is about to fail and persuading them to empty their account and deposit the funds into the kiosk. The virtual currency is then sent to the scammer’s crypto wallet via a transaction that typically cannot be reversed.

3 What are some other scams being used?

Romance scams – Con artists create a fake online profile and then target individuals to gain their trust over time, before asking for money.

Impersonation – Con artists claim to represent the IRS, FBI or another official agency and threaten victims, scaring them into making virtual currency payments.

Investment adviser scams – Victims are asked to make investments on bogus trading platforms. Scammers pretend to show victims investment gains and convince them to transfer increasingly larger amounts of funds to the investment before the victim is locked out of the account and unable to recover their money.

4 What are some tips to avoid being scammed?

To avoid falling victim to banking scams, do not pay anyone who asks for advance payment in the form of cryptocurrency, gift cards or money transfers. If asked to withdraw cash from a bank account in order to convert it to cryptocurrency, do not provide any personal information to the requestor. Then, contact a relative or friend for advice.

5 What should I do if I believe I was scammed?

Anyone who believes they may have been victimized by a banking scam should contact the Office of the Oklahoma Attorney General at consumerprotection@oag.ok.gov or 1-833-681-1895.

—Derrick James