Brenda Smith found herself unknowingly embroiled in a cyber scam involving cryptocurrency ATMs, where she deposited over $12,000 into two machines last year. The 76-year-old retiree from Calgary had suffered a stroke prior to the incident, which she believes affected her cognitive abilities.
Despite resembling traditional bank ATMs, cryptocurrency ATMs function differently by allowing customers to deposit cash and convert it into cryptocurrencies like Bitcoin. Unfortunately, Smith fell victim to the scam and is unaware of the whereabouts of her money.
The first crypto ATM was introduced in a Vancouver coffee shop in 2013 and has since grown to approximately 3,600 machines in Canada and over 39,000 globally. Authorities have raised concerns about the misuse of these machines for illicit activities.
CBC News conducted an investigation into the rise of fraud facilitated by crypto ATMs, revealing that these machines have become a primary tool for fraudsters to exploit victims. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) highlighted the prevalence of fraudulent activities involving Bitcoin Automated Teller Machines (BATMs) in a report obtained by CBC News.
While crypto ATM operators are categorized as money services businesses and are required to adhere to anti-money laundering laws, there are gaps in regulations governing transaction fees and limits. Law enforcement agencies, such as the RCMP and Toronto police, are facing challenges in tracking and investigating fraud cases involving crypto ATMs.
Canada boasts the highest number of crypto ATMs per capita globally, with nearly 91 machines per one million residents and a significant transaction volume. However, experts warn that the convenience and speed of crypto ATMs make them attractive to fraudsters, who exploit victims through various scams.
In light of the increasing misuse of crypto ATMs for fraudulent activities, efforts are being made to address the vulnerabilities and prevent further financial losses to unsuspecting individuals like Brenda Smith.