Why are Crypto ATM Scams Targeting Seniors on the Rise?

Attorney RJ Connelly III

"Cryptocurrency has rapidly emerged as a formidable force in digital finance, captivating a diverse audience and reshaping traditional economic landscapes," stated professional fiduciary and certified elder law Attorney RJ Connelly III. "Amid this evolution, crypto ATMs have surged in popularity, becoming a familiar sight in urban environments. However, these convenient machines are also becoming prime targets for scams—a worrying trend that predominantly impacts older adults."

Today's blog will explore the reasons behind the alarming rise of crypto ATM scams targeting seniors. We will examine scammers' tactics, highlighting their clever yet deceitful methods to exploit vulnerabilities. Additionally, we will offer practical and actionable advice to empower individuals to safeguard themselves against these fraudulent schemes.

What is Cryptocurrency

Cryptocurrency, commonly called crypto, is a digital payment system that utilizes cryptographic techniques for secure transactions. Unlike traditional currency, which is issued and regulated by central banks and governments, cryptocurrencies exist purely in digital form as decentralized assets. This means no single entity, such as a government or financial institution, controls them.

Cryptocurrencies operate on blockchain technology, a distributed ledger that records all transactions across a network of computers. This structure enhances transparency and security, as multiple participants validate each transaction before it is added to the blockchain.

While cryptocurrencies are primarily used for online transactions, their versatility allows for the potential purchase of tangible assets, including real estate, vehicles, and even certain luxury goods. As cryptocurrency acceptance increases, various sectors are beginning to embrace this digital medium for payment, further blurring the lines between traditional and virtual economies.

Overall, the rise of cryptocurrency represents a significant shift in the financial landscape. It empowers individuals with more control over their assets and transactions while challenging the established financial systems and regulatory frameworks.

Crypto ATMs

Crypto ATMs are kiosks that enable people to buy and sell cryptocurrencies like Bitcoin using cash or cards. Their popularity has surged due to the increasing interest in digital currencies. While crypto ATMs offer a convenient way to access cryptocurrencies, they also come with risks, especially for those unfamiliar with their operations. According to CointimeATM, the United States has the largest number of Bitcoin ATMs worldwide, totaling 29,851. Most of these ATMs are located in California, Texas, and Florida, which, coincidentally, also have the highest populations of senior citizens.

Targeting Seniors

Seniors are increasingly vulnerable to fraud targeted by perpetrators, particularly in the realm of digital currencies. This vulnerability results from their often considerable savings and limited experience in navigating the intricacies of these technologies. According to the Americans for Financial Reform (AFR) website, between 2021 and 2023, the number of internet crimes against seniors involving cryptocurrencies tripled, as reported by the FBI, while financial losses surged sevenfold, rising from $241,000 in 2021 to $1.65 billion in 2023.

AFR reports that these statistics likely represent an undercount. The FBI estimates that there are approximately 44 unreported fraud cases for every official complaint, suggesting that there were potentially 750,000 instances of fraud against older individuals involving cryptocurrencies in 2023. Moreover, the AARP estimates that one-third of financial exploitation cases against older adults by strangers remain unreported, indicating that the total financial losses due to cryptocurrency fraud affecting seniors could have approached $2.5 billion.

One contributing factor to this vulnerability is social isolation; many seniors find themselves disconnected from family and friends, which may lead them to seek information and companionship through less credible channels, including dubious online platforms and social media. This isolation creates an environment ripe for exploitation, as scammers can easily manipulate emotionally vulnerable individuals.

For instance, fraudulent advertisements that promise exorbitant returns on cryptocurrency investments frequently circulate via email and social media. These enticing offers prey on the desire for financial security, prompting seniors to make impulsive financial decisions without fully understanding the risks involved. The combination of financial naivety regarding digital currencies and the emotional aspects of loneliness makes it crucial to raise awareness and promote education among older adults to help protect them from such scams.

Tactics Used in Scams

Scammers employ several tactics to deceive seniors at crypto ATMs:

Phishing Scams - Fraudulent emails or texts are sent to trick seniors into providing sensitive information. Once scammers gain access, they can steal funds directly from victims' accounts.

Impersonation - Scammers often pretend to be officials from banks or government agencies. They might claim that the senior owes taxes or must invest in urgent opportunities, prompting the victim to withdraw cash at an ATM.

Fake Investment Opportunities—Fraudsters promote bogus investment schemes, luring seniors into depositing money into crypto ATMs with promises of unrealistic returns, often leading to total losses.

Tech Support Scams - Unscrupulous individuals may contact seniors under the guise of tech support, manipulating them into making transactions at crypto ATMs to "fix" non-existent issues.

Accessible and Anonymous

Crypto ATMs' accessibility and anonymity can further complicate matters. These machines enable quick transactions without sufficient identity verification. Navigating these systems can be daunting for seniors who may be uncomfortable with technology. A survey indicated that nearly 53% of seniors do not feel confident managing cryptocurrency. Further, the specialized language surrounding cryptocurrency can be confusing. Terms that are commonplace in the digital realm may leave seniors feeling lost and vulnerable.

Education for Senior Crypto Users

Education is one of the best ways to combat scams targeting seniors. Gaining awareness about cryptocurrency and its risks is crucial. Seniors should be encouraged to discuss digital currencies with trusted family members or financial advisors. Here are a few key points that seniors should consider:

Verify Information - Double-check any information related to cryptocurrency transactions and investment opportunities. Legitimate requests, especially from unfamiliar sources, should be scrutinized thoroughly.

Seek Guidance - Consulting with knowledgeable financial advisors before investing in cryptocurrency can help prevent costly mistakes.

Stay Informed - Regularly reviewing information about current scams can help seniors identify warning signs and avoid potential traps.

Legislation for Protection

As scams involving cryptocurrency ATMs are rising, stronger rules are urgently needed to protect consumers, especially older adults. Governments and regulatory agencies should create measures to keep crypto ATM operators accountable. This includes tightening the rules for verifying users’ identities and ensuring customers have clear information about fees and processes before making transactions.

Here in Rhode Island, lawmakers are actively working to tackle this growing problem of crypto ATM fraud. Catherine Taylor wrote a commentary on the Rhode Island Current website, which was shared with Connelly Law by Kathleen Heren, the recently retired Long-Term Care Ombudsman in Rhode Island. The commentary highlights a significant increase in reported cryptocurrency fraud cases, as shown by the Rhode Island State Police. In 2023, there were three reported cases; in 2024, that number jumped to 40, and already in the first three months of 2025, there have been 23 cases. All of the victims were over the age of 50. The commentary notes that many seniors are unfamiliar with these types of ATMs, and since there are no daily limits on transactions, they become easy targets for criminals.

The commentary also points out that Westerly Police Chief Paul Gingerella has recently testified before the Rhode Island Senate Commerce Committee, sharing stories of individuals losing up to $40,000 in just two days, with others losing more than $15,000 in a single day.

To combat these scams, AARP Rhode Island has teamed up with Senator Victoria Gu and Representative Julie Casimiro to propose new laws to protect older Rhode Islanders. If passed, this legislation would require several steps to ensure safety: it would make sure customers receive complete disclosures before transactions, set daily limits on how much can be withdrawn, mandate detailed receipts, require licenses for operators along with regular reporting to the Department of Business Regulation, and create a refund policy for cases of fraud.

A Final Word

"The alarming rise of cryptocurrency ATM scams specifically targeting seniors presents a pressing challenge that demands urgent attention and collective action," stated Attorney Connelly. "Many older adults, often less familiar with the intricacies of cryptocurrency, find themselves in a precarious position. The combination of their limited understanding and the ease with which this technology can be accessed creates a perfect storm for exploitation by savvy fraudsters who employ increasingly sophisticated tactics. Families, local communities, and regulatory agencies must join forces to educate seniors about the nuances of digital currencies and scams. By offering tailored resources, informative workshops, and accessible guidance, we can empower seniors to make informed financial choices."

The information presented within this blog is intended exclusively for general informational purposes and should not be construed as legal, financial, or healthcare advice. The content, materials, and insights provided may not reflect the most recent developments in these fields and, therefore, should not be relied upon for personal or professional decisions. Further, this blog may contain links to various third-party websites, which are included solely for the convenience of our readers. It is essential to note that Connelly Law Offices, Ltd. does not automatically endorse or recommend the contents of these external sites. Given the complexities and nuances associated with legal, financial, or healthcare matters, we strongly encourage individuals to consult a qualified attorney, a professional fiduciary advisor, or a healthcare provider regarding any specific issues or concerns. Your well-being and informed decision-making are of paramount importance to us.