Scammers Use Crypto ATMs for Drug Funds, Elder Fraud: FinCEN

TheCryptoTimesPublicado a 2025-08-07Actualizado a 2025-08-07

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has warned banks and financial institutions about rising fraud involving cryptocurrency ATMs. The agency shared drug cartels and scam operations are using these machines to move illegal money and trick vulnerable people, especially the elderly.

In a notice sent out Monday, FinCEN said these kiosks, also called Convertible Virtual Currency (CVC) ATMs, are being used to launder drug profits and run scams that are hard to trace. Some operators aren’t even following basic rules like customer verification, making it easier for criminals to use the machines without getting flagged.

One group specifically mentioned is Cartel Jalisco Nueva Generación, which is a major drug cartel based in Mexico. FinCEN said this group is using crypto ATMs across the U.S. to move money without relying on traditional smuggling routes. Chicago was listed as a hotspot, with more than 1,100 crypto ATMs.

Most of these scams target older people. The scammer pretends to be a tech support guy, a government officer, or even someone interested in a relationship. They talk the victim into taking money out of their bank, going to a crypto ATM, and sending it to a wallet the scammer controls. Once that money’s sent, it’s gone for good.

In 2024 alone, the FBI got almost 11,000 complaints about fraud through crypto ATMs, and those recorded over total losses of $246 million. That’s nearly double the number of complaints from the year before.

FinCEN is asking financial institutions to watch for suspicious activity and report anything unusual. When filing a Suspicious Activity Report, they’ve asked that banks use the term “FIN-2025-CVCKIOSK” to flag the case.

On the policy front, lawmakers are also trying to address the issue. Senator Dick Durbin introduced a bill earlier this year that would set transaction limits at crypto ATMs and require them to display clear fraud warnings.

FinCEN says the goal is to protect the digital asset space while cracking down on its misuse. The agency is asking banks to treat crypto ATMs as a growing risk.

Also Read: Andreessen Horowitz Warns of Crypto Regulations Loopholes

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