All top 15 crypto ATM users in Tasmania turned out to be scam victims, with all losing a collective AU$2.5 million.
Scammers take advantage of trust through fake investments and romance scams, which often target older Australians.
The increase in the number of crypto ATMs in Tasmania has created more opportunities for fraud due to light regulation and anonymity.
Financial institutions tend to flag suspicious transactions, which often leads scammers to direct victims to crypto ATMs.
Crypto adoption has been growing lately, especially in Australia among other parts of the world.
However, a disturbing rash of scams have shown up alongside this trend.
In Tasmania particularly, what started as a convenient way for locals to buy digital currencies like Bitcoin and Ethereum has turned into a nightmare for many.
According to recent findings from the Tasmanian Police Cyber Investigations Unit, the top 15 users of crypto ATMs in the state have all been victims of scams.
These individuals have collectively lost a staggering AU$2.5 million in total and this shows not just the dangers of crypto-related fraud, but also the need for tighter regulation.
The Tasmanian police reports that the scammers behind these operations often used various tactics.
Some of the most popular of these, unsurprisingly, were fake investments and romance scams.
Victims were often lured with promises of high returns, emotional companionship or both.
The majority of those targeted were older Australians, around the age of 65, who were manipulated into depositing large sums into cryptocurrency ATMs under false pretenses.
In many cases, scammers initially contacted their targets through phone calls, emails or social media platforms.
Once they built a rapport, they would shift the conversation to encrypted messaging apps like WhatsApp or Signal to avoid being traced when the scam does happen.
From there, they pressured victims into making deposits into crypto ATMs. They also convinced them that it was a secure way to invest or support someone they cared about.
The number of crypto ATMs in Tasmania has also exploded from just one machine in 2021 to at least 24 this year, according to Coin ATM Radar.
While this growth shows that interest in digital assets is on the rise, it has also created more opportunities for scammers.
Unlike regular ATMs, crypto ATMs are often lightly regulated and offer a level of anonymity that makes them especially attractive to fraudsters.
Crypto ATMs in Australia | Source: CoinATMRadar
They allow users to buy crypto quickly and easily, often without needing to verify their identity.
For scammers, this means that they can guide victims through a deposit with extremely low risks of being tracked.
Detective Sergeant Paul Turner, who is leading the investigation, noted that many of the victims were first flagged by their financial institutions for suspicious transactions.
When banks stepped in to question or block the payments, the scammers quickly rerouted their victims to crypto ATMs as an alternative.
The effects of these scams have been devastating. Victims have not only lost life savings, but many are now dealing with long-term emotional and financial consequences.
Some have had to delay retirement, sell off property or investments and rely on social welfare systems to get by.
Beyond the financial toll, many victims report feeling anxious, depressed and ashamed and are often too embarrassed to tell their families or seek help.
In response to the growing threat, both local and national governments are stepping up their efforts.
In Australia, AUSTRAC, the country's financial intelligence agency has rolled out new operating rules for crypto ATM providers.
These include transaction limits designed to curb high-volume scams, and a new bill which was introduced on June 3, and caps crypto ATM deposits at AU$5,000 per transaction.
Tasmanian police are also urging families to stay vigilant.
Some warning signs that a family member is being scammed, may include relatives frequently visiting crypto ATMs or making large cash withdrawals.
They also sometimes suddenly struggle with small daily expenses.
Meanwhile, New Zealand is taking a more aggressive approach to the problem, and has outright banned crypto ATMs.
The U.S. city of Spokane, Washington, has followed suit by removing all existing machines and banning the installation of new ones.
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