Iowa Authorities Reveal Funds Transferred Via Bitcoin ATMs Are Untraceable

Iowa Authorities Reveal Funds Transferred Via Bitcoin ATMs Are Untraceable

The local police of Iowa issued a press release that was shared on the Facebook account of the department.

The press release revealed that a woman hailing from the city of Clive, Polk County had become victim to a scam that involved the use of a Bitcoin ATM.

The scam

Someone impersonated the deputy of the Polk County Sheriff and called the victim in question, baiting her into transferring a sum of $6,600 via a Bitcoin ATM.

She had been informed that she would be arrested if she failed to do so. The Polk County Sheriff’s Office and the Clive Police Department are now collaborating to find the scammer in question.

They have emphasized that individuals would never be asked to make payments via Bitcoin ATMs if members of any law enforcement agencies do contact them.

The Clive Police further asserted that recovering money in such situations is immensely difficult because the funds that are transferred via Bitcoin ATMs are virtually untraceable.

Bitcoin ATMs

A report was issued by Chainalysis this year on crypto crime, which revealed that 1% of payments that are made by victims in scams are usually through crypto ATMs.

Even though this figure does not seem like much, the blockchain security and analytics firm said that it is not common practice to use ATMs generally for sending payments to most other illicit addresses.

The total volume of illicit transactions that were conducted in 2022 was a whopping $20.6 billion, but only 2.2% of these funds had gone to illicit addresses via ATMs.

This put the figure at about $67.5 million. But, most of this volume comprises of scams. In the previous year, the total amount of money sent via Bitcoin ATMs to scammers amounted to $35.3 million.

This means that almost half of the illicit transactions that are conducted via Bitcoin ATMs are made to scammers.

The reason

According to Chainalysis, the ease of use of Bitcoin ATMs is the reason behind their popularity amongst scammers.

It said that the ATMs are similar to the ones that are used for fiat currencies and they are the easiest method for conducting a crypto transaction.

This is because users only need to insert the cash, put in a crypto address, and then transfer the payment.

A warning had also been issued by the FBI at the end of 2022 about the widespread use of crypto ATMs by scammers.

The Connecticut police also issued a warning in which it stated that there were different types of Bitcoin ATM scams that were being conducted.

These include ‘romance scams’ in which the tricksters use dating apps to establish a rapport and then solicit funds.

There are also computer ‘anti-virus’ scams, which can begin with fake pop-up ads or be frauds outright, as obvious in the Clive case.

The common element in these scams is that a false sense of urgency is created by the criminals for tricking victims into depositing their money into crypto ATMs.

The Financial Conduct Authority (FCA) in the UK had ordered all crypto ATM operators in the country to cease their operations back in March.