The Federal Trade Commission (FTC) is reportedly issuing a warning about crypto ATM scams, noting that victims are losing thousands of dollars in the scheme. According to a new report by NBC News, the regulatory body is warning consumers that bad actors are stealing funds via Bitcoin (BTC) ATMs, or machines that convert cash directly […]
The post Federal Trade Commission Issues Warning on Crypto ATM Scams, Says Victims Losing $10,000 on Average: Report appeared first on The Daily Hodl.
Cybersecurity researchers say scammers have found a sophisticated way to drain bank accounts directly from ATMs – without needing a debit card in hand. Experts at the cybersecurity software firm ESET say they’ve discovered a dangerous and unprecedented type of malware they’re calling NGate. To begin the attack, scammers deploy a phishing technique to embed […]
The post Scammers Triggering Unauthorized ATM Withdrawals, Draining Cash Directly From Victims’ Bank Accounts: Cybersecurity Researchers appeared first on The Daily Hodl.
The number of new crypto ATMs in Australia has surged 17 times over the past two years, but TRM Labs has warned about their use in scams, fraud, and crime.
Australia has seen the number of new crypto ATMs swell by 17 times in the past two years, making it one of the world’s fastest-growing markets for the kiosks, despite rising concerns over their use by malicious actors.
The country is now the world’s third-largest market for crypto ATMs with 1,162 machines — up from just 67 in August 2022, data from Coin ATM Radar shows.
This means that 160 ATMs have been added since the end of April, when Australia just crossed the milestone of having over 1,000 active machines in operation.
The United States hosted its first 1,000 crypto ATMs in November 2017, while Canada achieved the same in January 2021.
Australia, the third-largest hub for Bitcoin (BTC) and crypto ATMs, recorded a new milestone with 1,000 active crypto-fiat machines now in operation.
As of April 24, Australia hosts an active network of 1,002 Bitcoin ATMs, making it the third country after the United States and Canada to achieve this feat. The nation represents 2.7% of the global Bitcoin ATM network.
According to Coin ATM Radar data, the U.S. hosted its first 1,000 crypto ATMs in November 2017, while Canada reached the same in January 2021.
Athena Bitcoin plans to integrate the Lightning Network into 100 of its machines in the next couple of months.
Athena Bitcoin, the company operating a state-owned chain of crypto ATMs in El Salvador, plans to integrate the Lightning Network into 100 of these machines in the next couple of months.
According to a press release from Nov. 7, Athena Bitcoin Global and Genesis Coin have already enabled the use of the Lightning Network technology across their technology infrastructure and will now begin implementing it, first in El Salvador and then across Latin America.
Related: El Salvador launches first Bitcoin mining pool as Volcano Energy partners with Luxor
The Lightning Network is a layer-2 payment protocol that enables faster withdrawals and minimizes transaction fees. It also avoids recording the transaction data in the accounting of the main network. According to Coin ATM Radar, only 3.7% of the world’s crypto ATMs support the technology.
Athena has not yet responded to Cointelegraph’s request for comment.
Athena intends to switch to Lightning support at 100 of the state-owned Chivo ATMs it’s operating in El Salvador by December 2023. The remaining kiosks, including the Athena-branded ones, will follow in Q1 2024. There are currently 215 crypto teller machines in El Salvador.
The country’s leader, Nayib Bukele, who made Bitcoin (BTC) legal tender in 2021, has recently announced his run for reelection as president in 2024. “Five more [years], five more and not one step back,” Bukele said in a speech in front of thousands of Salvadorans. In April 2023, Bukele made a bold move to eliminate all taxes on technology innovations, which could entice more entrepreneurs and foreign capital to move into the country.
Some experts, like Gabor Gurbacs, strategy adviser at investment management firm VanEck, believe El Salvador can follow Singapore’s lead and become a financial center in the Americas.
Magazine: What it’s actually like to use Bitcoin in El Salvador
Sam Bankman-Fried was the final witness to take the stand after more than three weeks of testimonies in court.
Last week, the criminal trial of FTX founder and CEO Sam “SBF” Bankman-Fried continued in New York, with the man himself giving testimony as part of his defense. According to the SBF, he didn’t know any details about the creation of North Dimension, an alleged “shadowy entity” used to launder customer funds from the crypto exchange through Alameda Research. It was former chief regulatory officer Dan Friedberg who provided him with the papers setting up the firm, which he signed without question, SBF claimed.
Bankman-Fried denied knowing why crypto exchange FTX began moving user funds from a bank account with Alameda to North Dimension. He suggested that banks may have been more comfortable with North Dimension in order to avoid well-known hedge funds connected to crypto, such as Alameda.
The former CEO also suggested that Gary Wang, FTX’s former chief technology officer, had been partly responsible for creating the “allow negative” button for Alameda Research. The feature gave the crypto hedge fund the ability to trade more funds than it had available. “At the time, I wasn’t entirely sure what was happening,” Bankman-Fried said regarding Alameda’s line of credit. “I thought the funds were being held in a bank account or sent to FTX in stablecoins. If Alameda was keeping it, I figured it would be reflected as a negative number on FTX.”
Bankman-Fried’s claims partly or directly contradict the testimonies offered by Wang and former Alameda CEO Carline Ellison. Wang took the stand on Oct. 6, saying Bankman-Fried had ordered him and former FTX engineering director Nishad Singh to implement the “allow negative” feature in 2019. Ellison testified that she had wanted to step down as CEO of Alameda, but SBF asked her to stay, citing the risk of rumors about the firm’s financial health.
California legislators have proposed the Digital financial asset transaction kiosks bill, which seeks to impose a cap on crypto ATM withdrawals of $1,000 per day in light of growing scams. Additionally, starting in 2025, the law would limit operators’ fees to $5 or 15% (whichever is higher). The bill, if approved, would come into effect on Jan. 1, 2024. The bill was introduced after legislative members visited a crypto ATM in Sacramento and found markups as high as 33% on some crypto assets compared with their prices on crypto exchanges. On average, a crypto ATM charges fees between 12% and 25%, according to a legislative analysis.
United States Senator Cynthia Lummis has called on the U.S. Department of Justice (DOJ) to consider charges against crypto exchange Binance following the terrorist group Hamas’ attack on Israel. In a letter to U.S. Attorney General Merrick Garland, Lummis and Arkansas Representative French Hill urged Justice Department officials to “reach a charging decision on Binance” and “expeditiously conclude” investigations of allegedly illicit activities involving Tether.
“We urge the Department of Justice to carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism through violations of applicable sanctions laws and the Bank Secrecy Act,” said Lummis and Hill.
The United Kingdom Financial Conduct Authority (FCA) claims that since the Oct. 8 crypto promotion rules came into place, firms are still failing to provide visible enough risk warnings and adequate information about risks and are making claims about the safety, security or ease of using crypto without highlighting the risks involved. Crypto-promoting firms have breached the new rules at least 221 times since coming into force, the FCA claims. While many of the FCA’s crypto-related alerts appear to be illegitimate schemes offering high-yield returns on crypto investments, the FCA has taken action against seemingly legitimate businesses as well.
A new legislative investigation found some crypto ATMs charging a premium as high as 33%, while a few ATMs had limits of up to $50,000.
California legislators have proposed a new bill titled “Digital financial asset transaction kiosks,” calling for a cap on crypto ATM withdrawals of $1,000 per day in light of growing scams. Additionally, starting in 2025, the law would limit operators' fees to $5 or 15% (whichever is higher). The bill, if approved, would come into effect on January 1, 2024.
The bill was introduced after legislative members visited a crypto ATM in Sacramento and found markups as high as 33% on some crypto assets compared to their prices on crypto exchanges. On average, a crypto ATM charges fees between 12% and 25%, according to a legislative analysis.
Government officials also found ATMs with limits as high as $50,000, prompting them to take regulatory measures to curb such high premiums and withdrawal limits. There are more than 3,200 Bitcoin (BTC) ATMs in California, according to Coin ATM Radar.
Democratic state Senator Monique Limón, who co-authored the proposed legislation, said the “new bill is about ensuring that people who have been frauded in our communities don’t continue to watch our state step aside" when there are real issues happening.
Another provision of the bill would require digital financial asset businesses to obtain a license from the California Department of Financial Protection and Innovation by July 2025
Crypto ATMs are a popular way for people to exchange cash for their choice of cryptocurrency, but have become a hub for scams and exploits because of the nature of transactions (i.e., hard cash). Unlike bank and wire transfers, this eliminates the possibility of leaving a trail.
Related: CoinSmart president says crypto taxes are a ‘little bit more favorable’ outside US
Some residents have recently been caught up in such scams where the scammer has persuaded the victim to go to the nearby crypto ATMs and deposit cash for the crypto of their choice. The victims of the ATM scam have lauded the move and said the low transaction limit will give them time to realize if they are being duped, reported the LA Times.
On the other hand, crypto ATM businesses said the new bill would harm the small operators who must pay rent on their ATMs. The operators noted that the bill fails to address the core issue of the fraud and instead takes a punitive path focused on a specific technology. They warned such a move would shudder the industry and hurt consumers while doing nothing to stop bad actors.
Magazine: Bitcoin is on a collision course with ‘Net Zero’ promises
Localcoin ATM will also be expanding its range of cryptocurrency offerings and launching a wallet app.
Canadian fintech corporation WonderFi, a firm backed by billionaire Kevin O’Leary, recently announced a strategic partnership between Bitbuy and cryptocurrency ATM provider Localcoin ATM.
The partnership, announced on Sept. 18, will shore up Localcoin’s crypto ATM offerings throughout Canada with Bitbuy’s exchange platform and the “deep liquidity” that comes with it, according to a press release from WonderFi.
PRESS RELEASE: Bitbuy Partners with Localcoin, Canada's Largest Bitcoin ATM Provider
— WonderFi (@WonderFi) September 18, 2023
Bitbuy's digital asset offering now powers nearly 50% of Canada's Bitcoin ATMs
MORE DETAILS: https://t.co/rqBDoHev1O
Bitbuy was the first cryptocurrency exchange to receive full regulatory approval in Canada. It was acquired by WonderFi in the January 2023 purchase of its parent company, First Ledger Corp., for close to $162 million (206 million Canadian dollars).
Localcoin purportedly operates the largest cryptocurrency ATM network in Canada. According to the press release, its 900 machines make up some 33% of the national total — which stands at approximately 2,700, making Canada second only to the United States in total adoption.
According to the press release, with this partnership, “Bitbuy’s digital asset services will cover nearly 50% of Canada’s Bitcoin ATMs.”
Last year, Ontario Securities Commission CEO Grant Vingoe said the regulator believed “more than 30 per cent of Canadians plan to buy crypto assets” in 2023, despite the recent exodus of numerous crypto companies from the market.
As Cointelegraph previously reported, while ByBit and Binance both made their exits from the Canadian cryptocurrency scene, citing regulatory changes, WonderFi CEO Dean Skurka told Cointelegraph last month that the increased regulatory clarity was bringing institutional investors to cryptocurrency and digital assets to Canada.
Related: CoinSmart president says crypto taxes are a ‘little bit more favorable’ outside US
In a statement given to Cointelegraph, Localcoin ATM CEO Tristan Fong also announced the impending launch of a Localcoin Wallet app and an undisclosed “extended range” of cryptocurrencies available at Localcoin ATMs:
“We’re always evaluating opportunities to grow and enhance our offerings. As part of our aggressive Canadian & International network expansion, we’re also excited to announce upcoming features: an extended range of cryptocurrencies available at our ATMs, our Localcoin Wallet app, and the ability to sell bitcoins online for e-transfer or cash pick up at our locations. While full details are on the horizon, we’re committed to bringing crypto to the masses."
While Hong Kong grabbed the top spot with a crypto readiness score (CRS) of 8.36, the United States fell down a spot to third place after recording a fall of 6.5% in its CRS score — from 7.7 in 2022 to 7.25.
Hong Kong was crowned the best-prepared jurisdiction for widespread cryptocurrency adoption in 2023, retaining its crypto-readiness prowess for the second year in a row.
A study factoring in the existence and reach of crypto — via ATMs, businesses, accessibility and legality — revealed stiff competition among the 2022 leaders as Hong Kong, the United States and Switzerland held on to the top three positions.
While Hong Kong grabbed the top spot with a crypto readiness score (CRS) of 8.36, the United States fell down a spot to third place after recording a fall of 6.5% in its CRS score — from 7.7 in 2022 to 7.25 in 2023. On the contrary, Switzerland’s CRS score jumped over 9% — from 7.5 to 8.18 — to rank 2nd worldwide.
As previously explained by Cointelegraph, factors such as crypto ATM installations, pro-crypto regulations, startup culture and a fair tax regime contribute to a country’s CRS. Slovenia, Canada and Australia managed to squeeze into the top 10 in 2023, as shown below.
When it comes to the masses, the Dutch showed the most interest in crypto per person. The United States is home to the largest network of Bitcoin (BTC) ATMs, however, Hong Kong has the most crypto ATMs per square foot given its significantly smaller land mass.
Estonia, Singapore and Switzerland are among the busiest hubs for crypto and blockchain companies. One of the primary drivers that can make or break mass crypto adoption is taxes. There are 12 countries that impose a 0% tax on crypto for individuals — including Germany, Panama, and Portugal among others — who remain well-positioned to climb up the ranks in the coming years.
In the US, New York became the most crypto-ready US state after recording CRS of 9.80 owing to numerous crypto-related legislation and a huge number of crypto and blockchain businesses in operation.
Related: US ‘the only country’ crypto startups should avoid, says Ripple CEO
India leads the global crypto adoption in 2023, a recent Chainalysis report revealed. Other lower middle-income (LMI) nations, including Nigeria and Thailand, bagged the second and third spot in the report.
In addition to leading grassroots adoption, India has also become the second-largest crypto market by raw estimated transaction volume globally, ahead of other major economies.
Magazine: Are DAOs overhyped and unworkable? Lessons from the front lines
The crypto ATM industry gets little attention relative to its size and issues. It appeals to users with motivations ranging from convenience to investment.
The crypto ATM business is thriving in the United States, despite criticism for illegal or predatory behavior, according to a report released by the Federal Reserve Bank of Kansas City. Crypto ATMs have a growing customer base that could sometimes benefit from better education about crypto, the report concluded.
Crypto ATMs convert Bitcoin (BTC) and often other cryptocurrencies or stablecoins into or out of fiat. Like traditional ATMs, crypto ATMs are usually placed in high-traffic locations and charge a fee for their service. That fee is one of the sources of controversy about crypto ATMs, Kansas City Fed lead payments specialist Franklin Noll wrote in the report. The average fee to use a crypto ATM is 15-16%, and operators may set an unfavorable conversion rate, effectively driving fees up to 20% in many cases.
The report identified four user groups for crypto ATMs. Some were cash users who may be unbanked, possibly by preference. Older people who found ATM technology more familiar than that of crypto exchanges made up another segment. Some users were motivated by the convenience of using an ATM, and others found ATMs provide greater relative anonymity.
Related: UK FCA shuts down 26 crypto ATMs following coordinated investigation
Crypto ATMs require identification (“such as a phone number,” the report stated). Crypto ATMs are money-servicing businesses, so they are subject to state and federal regulation, including Anti-Money Laundering. This can be a major source of overhead costs for the operators, although regulatory compliance is sometimes low in the industry, the report stated.
Minority groups and immigrants make up a significant user group for the ATMs. Immigrants tend to buy crypto through ATMs to use in person-to-person transactions such as remittances:
“One explanation for this usage may be that the cost of using cryptocurrency obtained from a BTM [Bitcoin ATM] in a remittance may be comparable to the cost of sending a remittance via third parties using cash, when factoring in convenience, time savings, and transactional certainty and speed.”
The crypto ATM industry is often accused of predatory inclusion, that is, “disguising high-risk, high-cost services as ways for the financially disadvantaged to gain entry to lucrative financial investments.” It added, “[T]he losses to uneducated crypto investors using BTMs to purchase volatile cryptocurrencies could be substantial.”
Bitcoin ATMs, which convert cash to cryptocurrency, have garnered criticism for their association with illegal or financially predatory behaviors. Some consumers are using them anyway. https://t.co/gIBEHcCjPW#PSRbriefing pic.twitter.com/OiMmfmj5LX
— Kansas City Fed (@KansasCityFed) August 30, 2023
The report also cited Chainalysis data showing that victims of scams moved $345 million through crypto ATMs in 2022. “The industry’s role in facilitating money laundering and scams may pose significant risks to the public,” the report concluded.
Industry statistics are rare and unreliable, but it is clearly growing after a COVID-related industry downturn, according to the report. Operator Bitcoin Depot went public in July and saw a significant revenue jump.
Magazine: Cryptocurrency trading addiction: What to look out for and how it is treated
