08-08-2025 
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The United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a warning on Monday urging financial institutions to “be vigilant in identifying and reporting suspicious activity” involving cryptocurrency ATMs. The agency identified the sector as being of particular use to criminals laundering drug money.
FinCEN is the U.S. Treasury bureau tasked with collecting and analyzing information about financial transactions to combat domestic and international money laundering, terrorist financing, and other financial crimes.
Its latest advisory notice stated that analysis of Bank Secrecy Act (BSA) information had revealed cryptocurrency ATMs, also known as convertible virtual currency (CVC) kiosks, are being used to launder suspected drug proceeds “as an alternative to bulk cash smuggling.”
The agency cited reports from the Drug Enforcement Administration (DEA) that showed criminal organizations such as the Cartel Jalisco Nueva Generación, a Mexican criminal syndicate, were increasingly using crypto ATMs in this way.
“While CVC kiosks can be a simple and convenient way for consumers to access CVC, scammers and other illicit actors can also exploit their simplicity and convenience,” said the FinCEN notice. “These non-compliant CVC kiosk businesses also often lack reasonably designed policies, procedures, and internal controls to respond to requests from law enforcement.”
Another worrying trend identified was a type of fraud scheme in which criminals direct victims to use crypto ATMs to send payments under false pretenses—a scam particularly targeted at older people.
According to FinCEN, in 2024, the Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3) received more than 10,956 complaints reporting using crypto ATMs, with reported victim losses of approximately $246.7 million.
This represents a 99% increase in the number of complaints and a 31% increase in reported victim losses from 2023.These worrying stats are backed up by recent data from the Federal Trade Commission (FTC), which likewise showed fraud losses related to crypto ATMs “skyrocketing,” increasing nearly tenfold from 2020 to 2023, and topping $65 million in just the first half of 2024.
“Criminals are relentless in their efforts to steal money from victims, and they’ve learned to exploit innovative technologies like CVC kiosks,” said FinCEN Director Andrea Gacki, in an August 4 statement. “The United States is committed to safeguarding the digital asset ecosystem for legitimate businesses and consumers, and financial institutions are a critical partner in that effort.”
FinCEN previously discussed illicit finance risks related to crypto ATMs in a 2019 advisory, in which it said “financial institutions should carefully assess and mitigate any potential money laundering, terrorist financing, and other illicit financing risks associated with CVCs.”
In its latest notice, the agency reiterated that financial institutions are required to file a suspicious activity report (SAR) if they know or suspect a transaction: involves funds derived from illegal activity or attempts to disguise funds derived from illegal activity; is designed to evade regulations promulgated under the BSA; lacks a business or apparent lawful purpose; or involves the use of the financial institution to facilitate criminal activity.
A booming space under fire
Current data from Coin ATM Radar puts the number of digital currency ATMs in the U.S. at over 30,000 nationwide, as of August 2025. Combined with the losses to scams and frauds noted by the FBI and FCA, this ever-expanding spread of crypto ATMs has put the sector in the regulatory spotlight.
In February, Senator Dick Durbin (D-IL), Ranking Member of the Senate Judiciary Committee, introduced the Crypto ATM Fraud Prevention Act, “to help prevent scammers from stealing Americans’ savings through cryptocurrency schemes.”
The bill would, amongst other measures, require digital currency ATMs to carry warnings about the risk of fraud; prevent new users from spending more than $2,000 daily or $10,000 over a 14-day period at crypto ATMs; require live, verbal confirmation for any transaction greater than $500; and allow for full refunds when users file police reports and alert operators within 30 days of their transactions.
Durbin’s bill remains in the committee stage in the Senate, and without any Republican co-sponsors, it’s a tough road to make it into law. However, it at least shows a willingness from some U.S. lawmakers to tackle the controversial crypto ATM sector—a cause that may be given renewed drive in the light of FinCEN’s latest advisory notice.
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