According to a new US Treasury Department report submitted to Congress under the GENIUS Act, crypto ATMs are increasingly being used by fraudsters and illegal actors.
Conclusion
- The US Treasury has warned that crypto ATMs are increasingly being used in fraud, with a reported loss of $246.7 million in 2024.
- The agency also identified mixers, DeFi platforms and on-chain tools as potential channels for laundering stolen crypto.
- At the same time, the report highlights AI, blockchain analytics and digital identity systems as emerging technologies that can strengthen anti-money laundering compliance.
The US Treasury warns that crypto ATMs are emerging as a key fraud tool
The report highlights a sharp rise in fraud involving digital asset shops, commonly known as crypto ATMs, which allow users to convert cash into cryptocurrencies.
Treasury officials have warned that the machines have become an attractive tool for criminals who pressure victims to send money quickly with limited oversight.
According to the data provided in the report, the FBI received more than 10,900 complaints about crypto ATM fraud in 2024, with a total reported loss of approximately $246.7 million.
The Treasury said fraudsters often instruct victims to deposit cash into machines and send cryptocurrency to wallets controlled by the fraudsters, often as part of fraud or investment scam schemes.
The report noted that older individuals are disproportionately targeted in these schemes, reflecting a broader trend in financial fraud cases involving digital assets.
Beyond crypto ATMs, the Treasury also noted several other areas where digital asset technology can be used for illicit financing. These include transaction mixers, decentralized financial protocols, and blockchains that can be used to hide the movement of stolen or illegal cryptocurrency on networks.
At the same time, the agency said new technologies can help financial institutions improve their ability to detect suspicious activity.
The Treasury pointed to tools such as artificial intelligence, blockchain analytics, digital identity solutions and application programming interfaces (APIs) as potential innovations that could strengthen anti-money laundering and counter-terrorist financing controls.
The agency considered more than 220 public comments from industry participants and technology providers in developing the report.
The Treasury emphasized that regulators should maintain a technology-neutral approach to compliance and allow financial institutions to adopt different tools depending on their risk profiles.
The findings come as US lawmakers continue to debate a new digital asset control framework under the GENIUS Act, which seeks to encourage financial innovation and strengthen safeguards against illicit financing.
