Arizona AG Warns Residents: Crypto ATM Scams Are Surging

Arizona Legal professional Basic Kris Mayes issued a statewide rip-off alert on Monday, warning residents that crypto ATM fraud has grow to be a mounting risk after Arizonans misplaced over $177 million to those schemes in 2024.

Her workplace concurrently launched a brand new fraud criticism type, enabling victims to report losses inside 30 days of being scammed.

The warning comes as a broad crackdown on crypto kiosk fraud intensifies throughout the USA and past, with the FBI reporting a 99% surge in complaints and over $246 million in whole losses in 2024.

From lawsuits towards main operators to sweeping federal laws, the trade is beneath hearth as lawmakers race to guard susceptible customers.

Arizona’s New Legal guidelines Goal Crypto Kiosk Fraud

Scammers usually attain victims via unsolicited calls or texts, impersonating banks, regulation enforcement, or family members earlier than pressuring them to deposit money into certainly one of Arizona’s roughly 600 crypto ATMs.

As soon as funds enter a kiosk, they’re practically unimaginable to recuperate. Scottsdale police alone have already reported $5 million in losses this yr.

“Fraudsters are more and more utilizing bitcoin ATMs to victimize Arizonans — scammers stole greater than $170 million from Arizonans final yr utilizing these crypto kiosks,” Mayes said, including that “In case you’re being directed to make use of one, there’s a really very excessive probability you’re being scammed.“

The state has additionally partnered with Yavapai County Sheriff David Rhodes to position bodily “STOP” indicators on Bitcoin ATMs throughout the state.

Past warnings, Arizona’s Crypto Kiosk License Fraud Prevention regulation, efficient since September 2025, caps each day transactions at $2,000 for brand new clients and $10,500 for current customers.

Operators should now difficulty full refunds to fraud victims who file a police report inside 30 days.

At the moment, Governor Hobbs additionally signed HB 2749 to create a state Bitcoin reserve funded completely by unclaimed digital belongings

Lawsuits and Indictments Shake the Business

Whereas Arizona tightens client safeguards, authorized battles are escalating elsewhere towards a few of the sector’s greatest gamers.

Washington, D.C., Legal professional Basic Brian Schwalb sued Athena Bitcoin after an investigation revealed that 93% of the corporate’s deposits throughout its first 5 months within the district have been instantly tied to scams, with a median sufferer age of 71, and that one resident misplaced $98,000 throughout 19 transactions.

The corporate allegedly charged undisclosed charges of as much as 26% whereas implementing a strict no-refunds coverage on fraud victims.

“Athena is aware of that its machines are getting used primarily by scammers but chooses to look the opposite method in order that it may well proceed to pocket sizable hidden transaction charges,” Schwalb declared.

The Athena case is way from remoted. Federal prosecutors in Chicago individually indicted Firas Isa, CEO of Crypto Dispensers, on money-laundering conspiracy costs after his community allegedly processed $10 million in fraud and drug proceeds.

Manhattan DA Alvin Bragg joined the stress, urging New York lawmakers to criminalize unlicensed crypto operations and warning of a “$51 billion legal economic system,” declaring that “In case you are working a crypto enterprise, you need to be licensed.“

States and Nations Race to Shut Regulatory Gaps

These enforcement actions have spurred legislative responses at each stage of presidency.

Senator Dick Durbin’s Crypto ATM Fraud Prevention Act, launched as Invoice S. 710, would mandate Treasury registration, fraud warnings, transaction caps, and sufferer refunds nationwide, whereas Wisconsin legislators have additionally launched parallel payments concentrating on the state’s 582 kiosks with $1,000 each day caps and strict identification checks.

Worldwide regulators are shifting in the identical path, with New Zealand imposing an outright ban on crypto ATMs beneath anti-money laundering reforms and Australian House Affairs Minister Tony Burke declaring, “Be in little question, crypto ATMs are a high-risk product,” after AUSTRAC discovered 85% of prime kiosk customers’ funds have been linked to scams.

Equally, Spokane, Washington, additionally turned the primary U.S. metropolis to ban the machines completely after federal probes revealed widespread fraud.

Amid the tightening, trade exercise just isn’t completely stalled. Washington state ordered Coinme to halt operations and repay $8 million after regulators discovered it had illegally transformed unredeemed buyer funds into company income, but Polygon is reportedly eyeing an acquisition of the agency for $100 to $125 million.

Bitcoin Bancorp additionally lately introduced plans to deploy 200 new ATMs throughout Texas, the place over 4,000 kiosks already function beneath one of many nation’s clearest regulatory frameworks.

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