Crypto ATM Fraud Surges Across Massachusetts - Lawmakers Demand Complete Ban
Digital currency kiosks become hotbeds for financial predators as scam reports skyrocket statewide.
Rising Threat in Plain Sight
Massachusetts residents face mounting losses through cryptocurrency automated teller machines—supposed gateways to digital wealth turning into exit ramps for personal savings. Authorities document alarming patterns of manipulation and deception at these unregulated terminals.
Regulatory Whack-a-Mole
Law enforcement scrambles to contain the bleeding while legislators propose nuclear options. The usual regulatory dance continues—financial watchdogs playing catch-up while innovation outpaces protection. Because what's finance without a little Wild West excitement?
The Ban Bandwagon Gains Momentum
Calls for outright prohibition grow louder as consumer protection agencies document case after case of irreversible financial damage. The debate pits technological progress against basic financial security—another chapter in the eternal struggle between innovation and regulation.
Meanwhile, traditional banks quietly enjoy watching crypto's growing pains from the sidelines—their ATMs might charge five-dollar fees, but at least they don't vanish with your life savings.
Crypto ATM scams on the rise in Massachusetts
The $11,000 loss by the owner of the business was just one of the many crypto scams that have occurred in the state. According to authorities, one resident lost $48,000 to scammers, while another one lost $4,900, with authorities saying the funds are usually difficult to locate.
“We’re finding that these are irreversible, untraceable, nearly impossible for us to investigate, but we spent dozens and dozens and dozens of hours [investigating],” Police Chief Jennifer Gundersen said.
Crypto ATM scams have grown into a nationwide crisis, with Middlesex County Sheriff Peter Koutoujian telling legislators some weeks back that there has been a surge in crypto ATM scams across the country. He claimed that overall, there have been more than 11,000 complaints to the FBI in 2024, specifically reporting crimes involving crypto kiosks. The victims, he claims, lost a combined $247 million, a 99% increase in the number of complaints, and a 31% rise in reported losses from 2024.
Meanwhile, the Joint Committee on Financial Services held a hearing on Tuesday regarding legislation to establish consumer protection guidelines for machines that allow users to buy or sell digital assets for cash (H 1247/S707). Under the guidelines, operators will have to be licensed as money transmitters, register each kiosk with the commissioner of banks, and file quarterly reports with the location of their kiosk. In addition, the new bill will impose a daily transaction limit of $1,000 per customer.
South Hadley wants to ban the machines
With the bill still currently making its way through the legislature, Gundersen is proposing an official ban on crypto ATMs in South Hadley. Based on the same ordinance passed in Waltham and Gloucester, business owners WOULD have about 30 days to remove the crypto ATMs before they are met with a $300 fine per day. The Select Board favored the measure, with moves now in place to vote on it by members at the November 5 special Town Meeting.
Currently, the town has only two businesses with these machines, but Gundersen claims that the new ordinance will prevent the machines from growing.
“I spoke today to the Waltham police chief, and they went from four machines to 14 machines in a couple of months,” Gundersen said. “Waltham did report that some of the store owners very likely knew that there was a senior citizen in their store being scammed, but because they were going to get a portion of that money, they actually assisted them with their transaction.”
Northwestern Assistant District Attorney Nicholas Atallah said he has received a couple of requests every month from municipal police departments to help them investigate scams involving crypto ATMs. Describing the scams, Atallah noted that the criminals usually pretend they are from law enforcement or authorities and ask victims to send money using the machines. He claimed that while it is possible to track these transactions, it remains incredibly difficult.
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