The US Federal Trade Commission (FTC) has warned the public about a scam asking people to pay with cryptocurrency through a crypto ATM. The scammers trick people into believing that they are either from a government agency, prize promoters or the law enforcement department.
The perpetrators trap the victim through text messages, phone call, social media messages and even email. The victim is persuaded to withdraw money from their investment accounts or the bank. And the perpetrator stays connected with the victim through a call, directing them to the crypto ATM to deposit fiat money and buy cryptocurrency, mainly bitcoin. Once this is done, the scammer sends a QR code with their crypto address enclosed in it.
The FTC says when a person buys the cryptocurrency, they are made to scan the QR code. As such, the money gets transferred to the scammer’s account. And the person ends up losing money. There has been a noted increase in such scams urging people to use crypto ATMs and QR codes for transactions.
In May 2021, the Federal Trade Commission said consumers were fooled into sending over $2 million to perpetrators who pretended to be Elon Musk! About 7,000 people have lost more than $80 million on such crypto scams from October 2020 to May 2021.
The Federal Bureau of Investigations has also stepped in to put a stop to such scams. The Bureau has urged people to be vigilant and not fall for such scams. It advised against making payments to people who they have only spoken or met online. HODL Bitcoin ATMs, which operates in Maryland, DC and Virginia, has warned its users about possible scams and urged them to stay alert.
People should be aware that crypto transactions are irreversible, thus the greater need for them to be cautious.