Bitcoin ATMs are spreading. They are legal but can be tools for cybercriminals

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Pop into a smokers’ shop or small convenience store in South Florida, anywhere from Homestead to Boynton Beach, and you might find not one, but two ATMs.

Look carefully before trying to make money because there is a big difference.

There are paper bills, green tickets to spend. The other issues a paper receipt for Bitcoin, by far the most popular cryptocurrency. Nothing wrong with that if you are comfortable converting your honestly earned dollars into cryptocurrencies.

But South Florida cybercrime investigators also claim that criminals are using the growing number of Bitcoin machines for nefarious purposes. They say the machines, while perfectly legal, are also largely unregulated and are often used to “wash” dirty money, drug-dealing money, robberies or other illegal activities.

When it is easy to invest in cryptocurrency online, Miami-Dade Cyber ​​Crimes Task Force Cmdr. George Perera questions the need for Bitcoin ATMs, which don’t leave much financial trail.

“Why do they have them unless they are for criminal activity?” she asked.

Finding a car is as easy as turning on a computer or cell phone. The bitcoindepot.com website, which helps you find a Bitcoin ATM just by entering an area code or city, shows that there are 1,691 machines in Florida and 384 between Boynton Beach and Homestead.

The machines, which have gained popularity in recent years alongside cryptocurrencies, are believed to be more than 50,000 across the country. There is a reason they are attractive to small businesses where they are more common: they are profitable to different levels.

The largest machine manufacturers are the companies Genesis Coin and General Bytes. They sell the machines up to $ 5,000. They are basically internet connected kiosks that send cryptocurrency to a digital wallet after real money has been entered. Machine operators collect commissions, which in Bitcoin ATMs account for a percentage of the transaction.

The shop operators, meanwhile, collect rents from the machine operator or owner for a three-by-three foot space.

In an industry speech in 2021, Digitalmint compliance director Seth Sattler acknowledged that there were some “bad actors” who gave the machine industry a bad reputation by continuing to allow anonymous transactions. Digitalmint is one of the leading suppliers of Bitcoin machines and technology in the nation.

“While a small number of Bitcoin ATM operators go above and beyond … others in the cash-to-crypto industry simply turn a blind eye and settle for these bad actors simply by applying minimal customer protections, which in many cases allow completely anonymous transactions, “Sattler told the news site.

The Bitcoin ATM looks almost exactly like its counterpart, with a computer screen, keyboard, and slot for inserting money, as if you were making a deposit into a regular ATM. And the way criminals clean up money with it is as brilliant as it is simple.

Here’s a scenario: A small drug dealer makes a few thousand dollars on a sale. The retailer then hires a child for a few dollars to type in a cryptocurrency address and put the money into the machine. In return, the machine issues a Bitcoin receipt of the same or similar value.

Miami-Dade cyber cops say one problem is that the machines are very lightly regulated. Most have a video recording device and some ask to scan driver’s licenses. Scammers, however, can get around that easily, the Miami-Dade cybercrime sergeant said. Bridget Doyle.

In the case of the above example, the boy hired by the recycler would be filmed. And he or she could easily have used a false identification. As for checking a crypto address, it changes with every action and is difficult to track down, investigators say.

Doyle said most businesses notify a merchant if more than $ 6,000 is deposited. He said there are about a dozen companies he is aware of now selling cryptocurrency machines.

“When criminals switch to cryptocurrencies, the first thing they do is find a new ID,” he said.


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2022 Miami Herald. Distributed by Tribune Content Agency, LLC.

Citation: Bitcoin ATMs are spreading. They are legal but can be tools for cybercriminals (2022, September 12) recovered on September 12, 2022 from https://techxplore.com/news/2022-09-bitcoin-atms-theyre-legal-tools.html

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