Arizona Targets Bitcoin ATM Scams Amid Rising Fraud Cases

PEORIA, Arizona — Arizona officials are intensifying efforts to combat increasing Bitcoin ATM scams, which have become a preferred method for fraudsters in recent years. House Bill 2387, sponsored by state representative David Marshall, seeks to introduce stricter regulations on Bitcoin ATMs by capping daily transaction amounts at $1,000, mandating state operator licenses, and implementing refund policies.

Attorney General Kris Mayes emphasized the growing threat of these scams, stating, “We’re seeing more and more scammers try to get people to pay them through bitcoin, which is, number one, really hard to trace” during an interview with ABC15.

One victim, a Peoria resident named Tamara, shared her harrowing experience from last summer, where she lost $17,000 in a scam. “It was $7,000 from my checking account, all gone, and I’m on Social Security, and then it was $10,000 from my IRA,” Tamara recounted.

Under the belief she was speaking with a legitimate PayPal representative, Tamara followed instructions from the fraudster, who claimed someone was attempting to hack into her accounts. “While I was on the phone with him, he said, ‘I just want you to know someone has tried to hack into not only your PayPal account but all of your accounts, your IRA.’”

The scammer coerced Tamara into withdrawing funds, leading her to purchase $7,000 in gift cards and transferring another $10,000 through a Bitcoin ATM. “My Spidey senses were going off, but it was like he said he wasn’t going to put the money back in unless I completed this task, and then it was like a threat,” she explained.

The 2023 FBI Cryptocurrency Fraud Report indicated that Arizona suffered approximately $127 million in losses due to virtual currency fraud, with individuals over the age of 60 being the most frequently targeted group. Mayes expressed further concerns regarding the lack of regulations, stating, “There’s not enough regulation on these Bitcoin machines and cryptocurrency, I believe, in general, but especially the ATM machines. So, we’re supporting and helping pass legislation that will at least limit the amount of money that people could put into a Bitcoin machine on a daily basis.”

The Federal Trade Commission (FTC) reported a stark increase in scams involving Bitcoin ATMs, with losses jumping from $12 million in 2020 to $112 million in 2023. In just the first half of 2024, fraud connected to these machines has already reached $66 million.