Officials say it’s tough to recover losses in rising crypto ATM cases

HOUSTON, Texas (KTRK) — A Texas agency tasked with investigating financial crimes says the majority of cases it sees about alleged cryptocurrency fraud involve ATMs.

Over the last two years, the Texas Financial Crimes Intelligence Center reported receiving 170 reports of cryptocurrency ATM victims.

The 13 Investigates teamed up with our partners at ABC News to look into the financial impact cryptocurrency fraud has on Americans across the U.S. and what’s being done in Texas to manage the problem.

Amy Nofziger, director of Victim Support at AARP’s Fraud Watch Network, said there are an estimated 45,000 cryptocurrency ATMs across the country.

“They look pretty much like a regular ATM that you would see at your bank to pull money out of. They’re usually located in convenience stores, liquor stores, grocery stores, anywhere that you frequent,” Nofziger said. “The difference is you don’t really get money out of them, you put money in and buy cryptocurrency.”

The FBI said victims lost nearly $247 million in crypto ATM schemes in 2024, up from $114 million between 2020 and 2023.

Officials say it isn’t individuals behind the fraud, but rather a group of criminals. They say the ploys can involve stories, like telling a victim they have an outstanding fine or a warrant and convincing them to deposit cash into an ATM, which then goes into the criminal’s crypto wallet.

“The criminals wanna get you in a heightened emotional state where you’re thinking emotionally, you’re not thinking cognitively, and so they’re gonna talk fast, they’re gonna make you act fast,” Nofziger said.

AARP said they’ve seen this become such an issue that they’ve started advocating for legislation across the country for stronger consumer protections and regulations on cryptocurrency.

Already, Nofzinger said, 13 states have passed tougher regulations on crypto ATMs, and they’re working to help pass even more legislation.

In Texas, lawmakers proposed a bill this year that would put a 72-hour hold on funds deposited into crypto ATMs, allowing people to get their money back more easily if they realize they’ve become a victim of fraud.

The proposed bill would also cap transactions at virtual currency kiosks at $3,000 in a 24-hour period. That bill passed the Senate but didn’t get out of the House.

However, there was a bill signed into law that went into effect on Sept.1 that allows cryptocurrency to be seized if it’s connected to criminal offenses.

A detective with the Colleyville Police Department testified before a Senate committee earlier this year about how problematic this issue has become.

“I had an elderly gentleman who came into our police department and filed a report with us, losing $17,000 in a crypto ATM scam. This is every single week we’re having this problem in a small town of only 26,000 population,” Colleyville Police Department Detective Jeff Prater told the Senate in April. “I can’t imagine what larger communities are (experiencing).”

The Texas Financial Crimes Intelligence Center told 13 Investigates it has successfully recovered $205,000 from victims of crypto-related fraud, but that it’s not easy.

“Recovering victim funds is difficult due to the timeframe between the victim being scammed and the time that it is reported to law enforcement,” the Texas FCIC said in a statement.

The Texas FCIC reminds residents that government officials and law enforcement agencies will not ask them to go to an ATM or virtual currency kiosk to pay outstanding debt, so that should be their first red flag of potential fraud.

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