Do crypto ATMs facilitate scam?

Uruguay has reportedly installed its first cryptocurrency ATM. While this may come as cheering news to crypto enthusiasts and investors, it is accompanied by a measure of scepticism. 

Recently, Uruguay was said to have joined the South American crypto revolution with an Automated Teller Machine point. It is believed to be the 11th nation in the continent to encourage digital money adoption and the development of online casinos.

Developed by two national crypto companies, Urubit and Inbierto, the ATM is claimed to be installed in Punta del Este, a city located in the southeast of the country. While the former focused on the software part of the system, the latter took care of hardware, reports said. 

According to Adolfo Varela, Inbierto’s CEO,  one of the aims of the machine is to create trust in the cryptocurrency market in the country, where most crypto commerce happens in peer-to-peer markets that cannot go through banking due to lack of regulations. With a cryptocurrency ATM, he. said possibility of being victim to a scam is said to be eliminated. Varela believes they will keep growing and extending their crypto ATM network across the country. 

He was quoted to have said, “We intend to continue growing in Maldonado, then Colonia, Montevideo and by the end of the year we want to have coverage throughout the national territory. With this it has happened to us that other countries have consulted us to be able to install it”. 

It is alleged that the installed crypto ATM supports only five cryptocurrencies (which include two national tokens): ferret token, urubit, bitcoin, binance coin (BNB), and binance USD (BUSD). The reports add that companies have not introduced Ethereum support to the machines because they rely on the Binance Smart Chain (BSC) to process transactions. 

With this new addition, South America is reported to house 79 crypto ATMs, representing 0.2 per cent of global installation. But there is more caution in other parts of the world. 

In the United States, for instance, the Federal Trade Commission (FTC) has warned of a new cryptocurrency scam that involves QR codes. The FTC says scammers are using impersonators to trick people into giving them money in transactions involving QR codes and cryptocurrency ATMs.

It wrote on Twitter: “🆕 #Scam Alert: There’s a new spin on scammers asking people to pay with #cryptocurrency. It involves an impersonator, a QR code & a trip to a store (directed by a scammer on the phone) to send your 💰 to them through a cryptocurrency ATM”. 

Last summer, esports powerhouse FaZe Clan was accused of being caught up in a “pump and dump” scheme involving crypto.  CNBC reported that securities regulators say cryptocurrency and other digital asset scams are the biggest threat to investors “by far.”

Indeed criminals are cashing out from these ATMs. The machines, mostly located in convenience stores and owned by private companies like best uk casino sites, allow customers to easily buy bitcoin and other cryptocurrencies using cash. The funds are then sent to that customer’s crypto wallet. However, the scam is increasing rapidly. 

The fraud, according to law enforcement, has become more pervasive as bitcoin ATM installations in the U.S. have skyrocketed in recent years. More than 26,000 machines stand today, a spike from 4,212 in January 2020, according to Coin ATM Radar. Well-known companies such as Walmart and Circle K have started installing them.

The FBI warned last week of fraud schemes using cryptocurrency ATMs and quick response, or QR, codes to facilitate payments.

“The FBI has seen an increase in scammers directing victims to use physical cryptocurrency ATMs and digital QR codes to complete payment transactions,” the bureau said in a public service announcement. QR codes can be used at the crypto ATMs to direct payments to intended recipients.

Here’s how this particular fraud works, according to the FBI: “The scammers provide a QR code associated with the scammer’s cryptocurrency wallet for the victim to use during the transaction. The scammer then directs the victim to a physical cryptocurrency ATM to insert their money, purchase cryptocurrency, and use the provided QR code to auto-populate the recipient address.”

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