U.S. Treasury Flags Crypto ATMs As Rising Fraud Risk In New Report

Crypto ATMs are increasingly being exploited by scammers and illicit actors, according to a new report from the U.S. Department of the Treasury submitted to Congress under the GENIUS Act.

The report highlights a sharp rise in fraud involving digital asset kiosks — commonly known as crypto ATMs — which allow users to convert cash into cryptocurrency.

Treasury officials warned that these machines have become an attractive tool for criminals who pressure victims into sending funds quickly with limited oversight.

According to data cited in the report, the FBI received more than 10,900 complaints related to crypto ATM scams in 2024, with total reported losses reaching approximately $246.7 million.

Treasury said scammers frequently instruct victims to deposit cash into the machines and send cryptocurrency to wallets controlled by fraudsters, often as part of impersonation schemes or investment scams.

The report noted that older individuals are disproportionately targeted in these schemes, reflecting a broader trend in financial fraud cases involving digital assets.

Beyond crypto ATMs, Treasury also flagged several other areas where digital asset technology could be exploited for illicit finance. These include transaction mixers, decentralized finance protocols and cross-chain bridges, which can be used to obscure the movement of stolen or illicit cryptocurrency across networks.

At the same time, the agency said emerging technologies could help financial institutions improve their ability to detect suspicious activity.

Treasury pointed to tools such as artificial intelligence, blockchain analytics, digital identity solutions and application programming interfaces (APIs) as potential innovations that could strengthen anti-money-laundering and counter-terrorism financing controls.

The agency reviewed more than 220 public comments from industry participants and technology providers while preparing the report.

Treasury emphasized that regulators should maintain a technology-neutral approach to compliance, allowing financial institutions to adopt different tools depending on their risk profiles.

The findings come as US lawmakers continue to debate new frameworks for digital asset oversight under the GENIUS Act, which seeks to encourage financial innovation while strengthening safeguards against illicit finance.