Bitcoin: Crypto ATMs Closed En Masse By Authorities!

The crypto market is evolving, and with this growth come new challenges, particularly in terms of security and regulation. Bitcoin ATMs have long represented a convenient solution for buying crypto quickly. However, these machines are now catching the attention of regulators, often involved in fraudulent activities. With over 600 machines shut down in just two months, authorities worldwide are tightening their positions. What does this wave of closures mean for the cryptocurrency sector?

Bitcoin ATMs: between innovation and increased risk

Bitcoin ATMs, once praised for their innovation that made access to cryptocurrencies easier, are now found to be linked to dubious practices.

According to data from Coin ATM Radar, the global network of crypto ATMs lost 435 machines in July and 182 in August 2024. These closures are not coincidental but rather the result of a worldwide crackdown, particularly in the United States, where 411 machines went offline in July.

These ATMs allow you to buy Bitcoin in minutes, but this speed and the relative anonymity of transactions make them a breeding ground for scams.

Fraudsters exploit these machines to persuade victims, often vulnerable, to transfer their funds.

In 2023, losses related to these scams exceeded $110 million, a statistic that underscores the seriousness of the situation. People over the age of 60 suffer the most damage, with a probability three times higher of becoming targets of these frauds.

Authorities have stepped up their efforts to regulate and monitor these machines. In the United States, the Federal Trade Commission (FTC) reported an alarming increase in scams involving Bitcoin ATMs since 2020. In the face of this rise in scams, regulators are beginning to see these ATMs from a different perspective, that of a potential risk to public safety.

A global crackdown on crypto ATMs

As Bitcoin ATM closures multiply, it is clear that governments are taking stricter measures.

In the United States, local committees are even discussing the idea of treating these machines “more like banks,” with much stricter compliance rules. These changes aim to limit illicit activities while framing transactions through enhanced know-your-customer (KYC) checks.

Germany has also stepped up the fight against crypto ATMs. On August 20, 2024, the German Federal Financial Supervisory Authority seized 13 machines in 35 different locations, showing that Europe is not spared from this phenomenon.

Authorities fear that, without adequate regulation, these ATMs will become hubs of criminal activity, particularly for transactions over 10,000 euros without proper KYC verification.

In other parts of the world, particularly in Singapore, authorities have simply banned cryptocurrency ATMs. This decision is part of a broader policy aimed at limiting advertising and public access to cryptos. Governments are thus attempting to reduce the impact of these machines on financial crimes while protecting consumers from costly frauds.

A model to rethink?

The wave of massive Bitcoin ATM closures raises questions about the future of these machines in the cryptocurrency landscape. Although these ATMs were designed to democratize access to Bitcoin, they are now seen as a weak link in the fight against fraud. Regulators and ATM operators will have to find a balance between convenience for users and transaction security.

Some companies, like Bitcoin Depot, which operates 21.9% of the world’s ATMs, have already begun to take measures to protect their customers. They now display anti-fraud warnings on their kiosks and offer on-screen alert messages. These initiatives aim to reduce risks for users, but will they be enough to reassure authorities?

With around 39,000 crypto ATMs still in service worldwide, the pressure is mounting to establish stricter regulation. The cryptocurrency sector is evolving rapidly, and solutions will need to adapt to remain relevant while meeting new standards imposed by governments. Meanwhile, Mastercard launches a self-managed crypto card.