She got a phone call to deposit her money. The terrifying scam inside bitcoin ATMs in the US
The stories have played out across the country.
In New Jersey, it was a 74-year-old retired art restorer contacted by a person purporting to be an Apple representative, advising her that her computer had been hacked and her credentials and accounts with her banks had been compromised.
He warned that a number of illegal transactions had been conducted under her name and accounts – including purchases of child pornography.
The only way to protect the US$25,800 (RM 109,554) sitting in her bank from the pending charges, he told her, was to withdraw the funds and deposit them into what he called a 'proxy' account through a bitcoin ATM located at a nearby Exxon gas station. There, he claimed, it could be held 'until her name was cleared.'
In Iowa, Attorney General Brenna Bird earlier this year filed lawsuits against two bitcoin ATM operators over what she said was their failures that led to residents transferring millions of dollars to scammers.
And in Silver Spring, Md, the victim was a 75-year-old woman who lost US$13,000 (RM 55,201) in the same kind of scam. In court filings, her attorneys said she was instructed by a purported Wells Fargo bank representative to take the money out of her account and bring it to a nearby bitcoin ATM, 'where it will be encrypted.'
The same kind of high-tech heists have taken tens of millions of dollars in recent years, according to the Federal Trade Commission.
Fueled by the Internet, scam tactics are always evolving. The game plan always involves finding a way to transfer money in ways it cannot be recovered. Sometimes it's a demand for a money order, or the use of gift cards that victims are told they must buy to avoid arrest or to secure access to their money.
Bitcoin ATMs – generally found at convenience stores, gas stations and other high-traffic areas – have increasingly become the latest tool to separate people from their money.
The machines look like a traditional automatic teller machine, but do not distribute cash. Instead, they take bills in various denominations in exchange for cryptocurrency, which is not tied to governments or banks and is untraceable. The bitcoin funds get credited to an anonymous account or 'wallet' controlled by the scammer. Once there, it cannot be easily tracked or recovered.
Last month, attorneys for three New Jersey victims filed a lawsuit in Superior Court against Athena Bitcoin, a company that provides the ATMs, as well as the retail stores that hosted the machines, over their use as 'payment portals' to enable the fraud. It charged them with violations of the state's consumer fraud act.
'I can't think of any use for these machines that isn't criminal money laundering or fraud,' said their lawyer, Marc Dann, a former Ohio attorney general who has similar cases pending in Ohio and Colorado. He plans to soon file additional complaints in Florida, Massachusetts and Mississippi.
Athena Bitcoin, based in Miami, did not respond to calls and emails to the company, to its marketing director, or to a message left with one of its attorneys. According to its website, it has 3,700 ATMS, operating in 33 US states and territories, and in four countries in Central and South America.
At a gas station convenience store in Union County, an Athena ATM was planted near the front entrance, next to a conventional ATM.
Its screen last Friday carried a warning: 'Did someone call or email you with instructions on how to 'protect" your money? Has someone reached out to you telling you that you should or must use this or any other ATM machine? IF YES, TO EITHER OF THE ABOVE, STOP NOW. Contact your back to verify the security of your account. ATM scams are real."
Dann said there are a number of companies that offer Bitcoin ATMs.
Some, he noted, have better security measures in place to prevent or minimise the risk that fraud victims will deposit funds. But the lawsuit alleged that the company does not have safeguards. The complaint sought a class action on behalf of others who may have been victimised, charging Athena with negligence, possession of stolen property, and racketeering.
'They were really scary...'
One of those named in last month's lawsuit was Joanne Nebus-Horning of Aberdeen, who is represented by Dann, said she got drawn into the scam when she got an email in March that appeared to be from Apple, informing her that her computer had been hacked.
'They said call this number, which I stupidly did,' she recalled in an interview last week. 'They did all these things to assure me they were legit.'
The number for Apple came up on her phone, which scammers are able to do by 'spoofing' the originating number to suggest it is coming from somewhere else. They put her in touch with someone who claimed to be head of security for her bank. And they told her not to let anyone else know what was going on.
'I just accepted it, and it snowballed from there,' said Nebus-Horning, who now operates her own antique appraisal business and is no neophyte to computers or technology. 'They were really convincing and scary. They told me that those who used my credit card or bank account were connected to child porn site.'
Afraid of what might happen, she followed their instructions to go to her bank and take out cash to put in a so-called proxy account for safe keeping. She said they started by asking for US$5,000 (RM 21,231) . Then they wanted more. A lot more.
She went to another bank branch to withdraw more money, where she was counseled to re-think what she was doing. But she persisted, based on the instructions she had been given. Then she took the stack of bills to a bitcoin ATM at a gas station in Holmdel, as she was told, and started feeding in the bills one by one.
'It took me 15 to 20 minutes,' she said. 'I was told if anyone came up, to tell them I'm talking to the machine and don't bother me.'
They kept promising her she would get her money back and they would call her. But by the next day, she realised she had been scammed. She called the police, but there was little they could do.
Nebus-Horning is not confused by computers. But she admitted the phone number convinced her the call had been from Apple.
'I didn't research. I didn't do due diligence,' she said.
The FTC said there has been 'a massive increase' in the amount of money consumers report lost to scammers involving bitcoin ATM machines. From 2020 to 2023, those losses increased nearly tenfold to over US$110mil (RM467mil). In the first six months of 2024, they topped US$65mil (RM276mil) – the most recent data available.
Law enforcement agencies say cryptocurrency ATMs have also been used to launder drug proceeds.
A 2021 report by the State Commission of Investigation found the machines largely unregulated with no safeguards against fraud, noting one scheme where cryptocurrency kiosks were utilised to carry out a scam that duped multiple victims into spending a total of more than US$600,000 (RM2.5mil) to buy vehicles advertised for sale on eBay that did not really exist.
Here in New Jersey, state Sen. Paul D. Moriarty, D-Gloucester, is now seeking to ban Bitcoin ATMs, similar to those operated by Athena Bitcoin.
His bill, S-3694, would make it an unlawful practice to control, install, manage or sell a cryptocurrency ATM in New Jersey.
'I don't believe there is any legitimate purpose for these Bitcoin machines. None,' said Moriarty in an interview. 'Even if someone wanted to buy Bitcoin, no one would buy it from a Bitcoin machine. So what's going on? It's ludicrous that someone would be going to a laundromat or gas station or convenience store to make an investment. It's laughable.'
He said the proposed legislation was sparked by a call from a friend who saw a distraught person at a gas station putting money in a bitcoin ATM and was told by an attendant that they see people coming in all the time and depositing large amounts of cash.
'I went to that gas station myself and talked to the owner and asked him why they have that here,' he recalled. 'He told me we try and talk them down, but they pay me US$200 (RM849) to put it here.'
Incredulous, he asked, 'Do you feel good about it?'
Months later, he says it was still there.
Bitcoin ATMS, he said, 'don't dispense anything except fraud. They shouldn't call them ATMS. There's no reason for them to exist.'
His bill, introduced in September, and a companion piece of legislation in the Assembly, are both sitting in committee.
Nebus-Horning has yet to get any of her money back. – nj.com/Tribune News Service
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
10 hours ago
- The Star
China's top HK official says security will ensure city's success
Director of the Hong Kong and Macau Affairs Office Xia Baolong's comments build on China's emphasis on national security in recent years. -- PHOTO: AFP HONG KONG (Bloomberg): China's top official for Hong Kong affairs said the city needs to prioritize national security to ensure prosperity. The China-imposed national security law helped Hong Kong maintain its status as an international financial hub, Xia Baolong, director of the Hong Kong and Macau Affairs Office in Beijing, said Saturday on his third trip to the semi-autonomous city in three years. "Profound changes are occurring inside and outside Hong Kong. It is necessary to fully implement the One Country, Two Systems principle, guided by national security, to provide favorable safety protection for achieving better development of Hong Kong,' Xia told a government forum marking the fifth anniversary of Beijing's implementation of the 2020 national security law, which silenced dissent in the once-freewheeling territory. His comments build on China's emphasis on national security in recent years, after massive pro-democracy protests roiled the former British colony in 2019. A continuing crackdown on perceived threats and the introduction of supporting legislation has stifled political dissent and led to the imprisonment of dozens of former activists. Earlier this month, Beijing's national security office in the city carried out its first known joint operation with local police to investigate a case of alleged foreign collusion. In the same week, authorities invoked a security law to ban a Taiwanese-made video game they accused of advocating for overthrowing the government. Xia's speech at the forum represents the most public appearance he has made during his five-day trip that began Wednesday, which has included meetings with political and business leaders. He also held discussions with university presidents earlier in the week, in a move seen as reinforcing Beijing's vision for Hong Kong as an innovation and talent hub. Appointed as Beijing's top man in Hong Kong in 2020, Xia's tenure has seen growing integration between the Asian financial hub with the rest of China. He has urged the city to accelerate the development of its so-called Northern Metropolis, a sprawling area bordering the mainland city of Shenzhen. Xia's visit comes as Hong Kong grapples with economic headwinds, buffeted by a slowing Chinese economy and a prolonged property slump. The city is also caught in the crossfire of the US-China trade war, with tariffs imposed by the Trump administration now applying to Hong Kong-made goods, further blurring the lines between the city and mainland China. Still, some observers argue Hong Kong could paradoxically gain from the deteriorating US-China relationship. Having declared the city "over' last February, former Morgan Stanley Asia Chairman Stephen Roach said recently that the territory may benefit because of its unique position as China's most important window to international finance. -- ©2025 Bloomberg L.P.
The Star
13 hours ago
- The Star
Staff at second-hand luxury stores in Hong Kong fear for safety after robbery
Employees at second-hand luxury goods stores in Hong Kong have voiced fears over their safety after a Tsim Sha Tsui shop was robbed of HK$3 million (US$382,170) worth of Hermes and Van Cleef & Arpels products, with a saleswoman rendered unconscious during the crime. Security and insurance experts highlighted the importance of insuring luxury goods, installing comprehensive antitheft measures and carrying out staff training to minimise the risk of becoming a target for criminals.
New Straits Times
18 hours ago
- New Straits Times
Pro-Palestinian protest leader Mahmoud Khalil released from US custody
NEW YORK: Mahmoud Khalil, a former Columbia University student who was one of the most visible leaders of nationwide pro-Palestinian campus protests, was released Friday from a federal detention centre. Khalil, a legal permanent resident in the United States who is married to a US citizen and has a US-born son, has been in custody since March facing potential deportation. "This shouldn't have taken three months," Khalil, wearing a Palestinian keffiyeh scarf, told US media outside an immigration detention centre in Jena, Louisiana hours after a federal judge ordered his release. "(President Donald) Trump and his administration, they chose the wrong person for this," he said. "There's no right person who should be detained for actually protesting a genocide." The Department of Homeland Security criticised District Judge Michael Farbiarz's ruling Friday as an example of how "out of control members of the judicial branch are undermining our national security." Under the terms of his release, Khalil will not be allowed to leave the United States except for "self-deportation," and faces restrictions on where he can travel within the country. Khalil's wife, Michigan-born dentist Noor Abdalla, said her family could now "finally breathe a sigh of relief and know that Maumoud is on his way home." "We know this ruling does not begin to address the injustices the Trump administration has brought upon our family and so many others the government is trying to silence for speaking out against Israel's ongoing genocide against Palestinians," added Abdalla, who gave birth to the couple's first child while her husband was in detention. Since his March 8 arrest by Immigration and Customs Enforcement agents, Khalil has become a symbol of Trump's campaign to stifle pro-Palestinian student activism against the Gaza war, in the name of curbing anti-Semitism. At the time a graduate student at Columbia University in New York, Khalil was a prominent leader of nationwide campus protests against Israel's war in Gaza. Following his arrest, US authorities transferred Khalil, who was born in Syria to Palestinian parents, nearly 2,000 kilometres from his home in New York to the detention centre in Louisiana, pending deportation. Secretary of State Marco Rubio has invoked a law approved during the 1950s Red Scare that allows the United States to remove foreigners seen as adverse to US foreign policy. Rubio argues that US constitutional protections of free speech do not apply to foreigners and that he alone can make decisions without judicial review. Hundreds of students have seen their visas revoked, with some saying they were targeted for everything from writing opinion articles to minor arrest records. Farbiarz ruled last week that the government could not detain or deport Khalil based on Rubio's assertions that his presence on US soil poses a national security threat. The government has also alleged as grounds to detain and deport Khalil that there were inaccuracies in his application for permanent residency. Amol Sinha, executive director of the American Civil Liberties Union of New Jersey, which is among the groups representing Khalil, welcomed the release order.
