OPINION: Bitcoin Depot at center of growing number of scams

Jacob Arnold of Las Cruces was among those hit with an imposter scam that was prevalent enough to prompt a recent warning from the U.S. District Court for New Mexico.

“I was scammed for $10,000,” Arnold said in a letter to the Journal. “It is hard for me to write that down. I am ashamed and feel I have failed in protecting my family.” Arnold says he was roped in by threatening phone calls from fake Doña Ana County sheriff’s deputies who warned of “immediate jail time and severe penalties if I did not pay a preemptive surety cash bond.” The scam artists told him he had neglected to show up for federal jury duty and was facing charges of failure to appear and contempt of court.

Among the other agencies impersonated by the fraudsters in subsequent emails were the FDIC, the IRS and a surety bond authority company.

As is becoming increasingly common in fraud cases, the imposters ordered that the money be paid with cryptocurrency — specifically, at a Bitcoin Depot kiosk that he could find at a Circle K store. He was given a QR code to pay the bond.

Arnold followed instructions and found that 1) he had never been summoned for jury duty in the first place and so there were no criminal charges against him and 2) he was now out $10,000.

He is trying to get Bitcoin Depot to reimburse him for the loss.

A spokesperson for Bitcoin Depot said the company would not comment on specific cases, but that it is registered with FinCEN, a federal agency, and displays “multiple scam warnings throughout and (offers) live customer support via phone, text, chat and email to assist users.”

Arnold is not alone in losing a significant chunk of change in this way.

The Iowa Attorney General’s Office in February filed suit against Bitcoin Depot, claiming that residents in that state had lost $7.2 million in transactions through the company’s ATMs. Most scam victims and crypto ATM users were older than 60, according to a fact sheet released by the office. The state also filed suit against CoinFlip, another crypto ATM company.

The New Mexico Department of Justice is looking into three complaints that are similar to Arnold’s, spokeswoman Lauren Rodriguez says.

In 2024, victims nationwide reported losing more money to scams in which they paid with cryptocurrency or bank transfers than all other payment methods combined, according to the Federal Trade Commission.

Specifically, Bitcoin ATMs of all kinds were at the center of $65 million in fraud losses during the first half of 2024 — a tenfold increase over 2020. Most of those losses were a result of government impersonation — such as in Arnold’s case — business impersonation or tech scams.

Bitcoin ATMs look like traditional ATM machines and ”are often found at convenience stores, gas stations and other high-traffic areas,” the FTC says. “As soon as consumers scan a QR code provided by scammers at the machine, their cash is deposited straight into the scammers’ crypto account.”

A few things to keep in mind: Don’t believe anyone who says you need to pay something by using a Bitcoin ATM (or by purchasing gift cards, for that matter) as a way to protect your money or fix a problem, the FTC advises.

Also, never withdraw cash on the basis of an unexpected phone call or message.

“Only scammers will tell you to do that,” the agency says.