Scams, Chainsaws, and Bans: The 2025 Trifecta of Crypto ATMs

Source: Decrypt

Compiled and organized by: BitpushNews

When law enforcement officers rush into the streets with chainsaws targeting Bitcoin ATMs, and scam amounts surge by 99% in a year, 2025 is set to become the “breakthrough year” for the cryptocurrency ATM industry. This nationwide crackdown on 30,750 machines reveals a real-world scar in the crypto world—the most vulnerable elderly are becoming the biggest victims in this “cash-to-nightmare” game.

In 2025, Bitcoin and cryptocurrency ATMs face stricter scrutiny as U.S. authorities and legislators attempt to address the increasing number of scams facilitated by these machines.

Some law enforcement officials have “manually” cut through the problem with chainsaws, while two state attorneys general have sued several of the largest companies in the field. Meanwhile, multiple agencies and other entities have issued consumer warnings targeting the elderly.

Cryptocurrency ATM operators claim their machines provide valuable services, allowing anyone to buy digital assets like Bitcoin with cash. However, critics argue that these companies could have taken more measures to prevent elderly Americans from losing money to scams—even if it was detrimental to their business.

Scam: “Victims are the elderly”

According to an annual report, last year Americans reported $246 million in losses caused by cryptocurrency ATMs to the Internet Crime Complaint Center, a 99% increase from the previous year. About 43% of these losses involved Americans over 60.

The scams are fairly straightforward: elderly individuals withdraw cash from bank accounts, convert it into cryptocurrencies using operators’ machines, and then send it to impersonators posing as government officials, businesses, or tech support.

However, some scam variants are more “creative,” including a case in Massachusetts where residents lost money after being asked to pay in cryptocurrency for alleged “unfulfilled jury duty.”

The irreversible nature of cryptocurrency transactions makes it difficult for victims to recover funds after scammers disappear, and the user agreement terms related to these machines have become another potential obstacle in court.

For example, the Iowa Supreme Court, in two cases heard this year, found that a cryptocurrency ATM operator has the right to retain cash related to fraud because the company’s terms and services require users to declare they own a digital wallet to receive funds—not a third party.

“Once the transaction is completed, when users insert cash and the wallet they chose receives the cryptocurrency deposit, our involvement in the transaction ends,” said Chris Ryan, Chief Legal Officer of Bitcoin Depot, in June to Decrypt.

Bitcoin Depot cooperates with local law enforcement to track victims’ cryptocurrencies, but Ryan said that authorities, by destroying the company’s machines, are creating more victims, causing property damage and cash losses at least a dozen times a year.

That month, officers in Jasper County, Texas, used a chainsaw to “cut open” a Bitcoin Depot terminal at a rural gas station and recovered $3,200 in cash. Bitcoin Depot insists that money belongs to the company, while police consider it recovered stolen funds.

“Common-sense barriers”

In Iowa, Bitcoin Depot and its competitor CoinFlip face pressure from State Attorney General Brenna Bird. According to a briefing, she filed lawsuits against both companies in February, accusing them of profiting from scam victims while charging “huge, hidden transaction fees.”

Criticism of hidden fees was later echoed by Washington, D.C. Attorney General Brian L. Schwalb, who filed a lawsuit against crypto ATM operator Athena Bitcoin in September. He alleged that, in some cases, residents of the federal district paid undisclosed fees as high as 26%.

Schwalb’s lawsuit accuses Athena of exploiting the elderly and violating consumer protection laws, arguing that given the circumstances under which most victims interact with these machines, the warnings displayed on the machines are irrelevant.

The complaint states: “Elderly scam victims, terrified inside gas stations, with pockets stuffed with an unsettling amount of cash, do not understand what it means to ‘generate’ a cryptocurrency wallet or own their ‘personal Bitcoin wallet.’”

An Athena spokesperson told Decrypt that the company strongly disagrees with these allegations and will defend itself in court. Bitcoin Depot and CoinFlip deny the allegations in Bird’s lawsuit and emphasized procedures such as identity verification and transaction refunds to ABC News.

This year, Senator Dick Durbin (Democrat-Illinois) introduced the “Cryptocurrency ATM Scam Prevention Act.” The legislation would impose strict transaction limits on crypto ATMs and require companies to provide full refunds if victims report losses within a certain timeframe.

Durbin said the legislation includes “common-sense safeguards” to protect the elderly, but since it was introduced in the Republican-led Senate in February, it has yet to make progress.

State Actions

Despite the lack of progress at the federal level in regulating crypto ATMs this year, according to the American Association of Retired Persons, more than a dozen states have drafted or passed bills or regulations requiring transaction limits, scam warnings, refunds, or new licensing requirements.

In June, this nonprofit organization focused on American seniors found that 20 states had taken action to address the rising scams facilitated by crypto ATMs, noting that it “continues to work with legislators in other states to adopt similar protections to prevent fraud involving crypto self-service terminals.”

At that time, Spokane, Washington, city council had just passed a citywide ban on crypto ATMs, affecting about 50 self-service terminals locally.

In August, Illinois became the first Midwestern state to pass a law aimed at curbing fraud related to crypto ATMs, requiring operators to register with state regulators, setting a transaction fee cap at 18%, and limiting new user daily transactions to $2,500.

The same month, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network issued an emergency warning about crypto ATMs, stating that “the risk of illegal activity increases if operators do not maintain proper procedures under the Bank Secrecy Act.”

According to Coin ATM Radar, by mid-November, approximately 30,750 crypto ATMs had been installed across the U.S., accounting for 78% of the global total of self-service terminals. Nonetheless, since 2022, the total number of machines worldwide has hovered around 40,000.

U.S. local governments have been seeking restrictions on crypto self-service terminals, while some countries have adopted comprehensive safeguards. For example, New Zealand announced a nationwide ban on such machines in June as part of efforts to curb criminal financing.