Cryptocurrency ATMs: A Growing Concern Amid Rising Scams in Eastham

Eastham’s Cryptocurrency ATM Sparks Concerns Amid Rising Fraud Cases

EASTHAM, MA — Nestled between freezers stocked with ice at the local Cumberland Farms, a Bitcoin Depot cryptocurrency ATM stands in stark contrast to the familiar Citizens Bank ATM. While the latter has become a staple in American banking since its inception in 1969, the crypto ATM represents a newer, more controversial financial frontier.

This Bitcoin Depot machine allows customers to purchase up to $25,000 in cryptocurrencies like Bitcoin and Ethereum, but it has recently come under scrutiny. Law enforcement and consumer advocacy groups, including the American Association of Retired Persons (AARP), are raising alarms about the potential for fraud associated with these machines.

“It’s not uncommon for people to lose $10,000 or $20,000 in this machine,” warned Dennis Hohengasser, president of AARP Massachusetts. He testified at the Massachusetts State House in October, advocating for legislation to limit daily transactions at crypto ATMs. According to FBI data, Americans lost over $9 billion to cryptocurrency scams in 2024 alone.

Cryptocurrency ATMs allow users to deposit or withdraw cash from their digital wallets, but the transactions are often irreversible, making them a prime target for scammers. Hohengasser noted that fraudsters have increasingly directed victims to these machines, replacing gift cards as the preferred method for illicit transactions.

District Attorney Robert Galibois echoed these concerns, stating that his office has seen “far too many” fraud cases involving crypto ATMs, although he did not provide specific numbers. “Heed all of the warnings,” he cautioned, particularly to the elderly, who are often targeted by scammers.

While the crypto ATM at Cumberland Farms has not yet been linked to any reported scams, Eastham Police Det. Andi Murphy noted that residents have been directed to other crypto ATMs in nearby Harwich. “The number of people who use them for a legitimate purpose is few and far between,” she said.

In September, Washington, D.C. Attorney General Brian Schwalb filed a lawsuit against Athena Bitcoin ATM, alleging that a staggering 93 percent of deposits were made by scam victims. Hohengasser remarked, “We firmly believe the crypto ATMs are used primarily for fraudsters to get money.”

Despite the risks, the number of crypto ATMs is on the rise. Massachusetts now boasts over 600 machines, a 100-percent increase since late 2023. While at least 11 states have enacted regulations, Massachusetts has yet to take action, although some municipalities have banned the machines altogether.

AARP state director Jennifer Benson emphasized the urgency of legislative action, stating, “The longer the legislation sits, the more fraudulent activity can occur.”

During a recent visit to the Bitcoin Depot ATM, an Independent reporter observed customers casting sideways glances at the machine, unsure of its purpose. Employees at Cumberland Farms reported infrequent usage of the ATM, with one stating, “I only hear bad things. But since they’re not trying to remove it, someone’s got to be using it.”

Despite the growing concerns, both Cumberland Farms and Bitcoin Depot declined to comment on the rationale behind hosting the ATM. The machine does feature pop-up warnings advising users against purchasing Bitcoin for IRS payments or under duress, highlighting the potential dangers of cryptocurrency transactions.

As the debate over the safety and regulation of cryptocurrency ATMs continues, Eastham residents and officials alike are left grappling with the implications of this digital currency revolution. With scams on the rise and legislation lagging, the future of crypto ATMs remains uncertain.