Bitcoin ATMs Clustered in Black, Latino and Low-Income Neighborhoods
More than 80% of the world’s bitcoin ATMs are found in the United States.
And as noted in a Financial Times opinion piece Friday (Sept. 5), these ATMs appear to be clustered in Black, Latino and lower-income communities, similar to payday lenders and check-cashing operations.
“Providers have denied targeting areas based on any racial profile,” writes Dedrick Asante-Muhammad, president of the Joint Center for Political and Economic Studies. “But the apparent disproportionate placement is increasingly being recognized as a cause for concern.”
The piece goes on to note an April report from the FBI showing that there were 10,956 complaints connected to bitcoin ATMs in 2024, a 99% increase year over year.
That report charted a significant rise in cryptocurrency fraud, with at least $9.3 billion in losses reported in 2024, up 66% from 2023. Those losses were related to investment scams, extortion, sextortion and fraudulent activity involving cryptocurrency ATMs and kiosks.
Asante-Muhammad also argues that the standard structure and operation of bitcoin ATMs also poses a risk to the neighborhoods where they are found. These machines are primarily one-way, providing solely cash-to-bitcoin transactions. This essentially locks consumers into a volatile asset with no way to switch their cryptocurrency back to dollars.
Despite the apparent risks, Asante-Muhammad added, there is nothing in the recently passed cryptocurrency legislation to offer consumer protections from the issues posed by bitcoin ATMs.
In an interview with CNBC last year, Brandon Mintz, CEO of Bitcoin Depot, the largest operator of bitcoin ATMs, said his company’s machines are designed to deter hackers, but acknowledged that consumers still need to take precautions.
“Customers of bitcoin ATMs should never send bitcoin or other cryptocurrencies to unknown digital wallets or individuals they don’t know and trust. It’s important to remain vigilant and skeptical of anyone asking for cryptocurrency payments, especially if the request comes with a sense of urgency or threat,” Mintz said.
A number of countries have imposed regulations or issued warnings about the machines because of their popularity with criminals.
For instance, the U.S. Federal Trade Commission (FTC) said last year that bitcoin ATMs had become a “payment portal for scammers” as they’ve risen in popularity.
Losses from scams tied to the ATMs ballooned between 2020 and 2023, from $12 million to $114 million, the regulator said, noting that because most frauds go unreported, the $114 million figure likely reflects only a sliver of the losses.
More recently, the government of New Zealand called for a ban on crypto ATMs. Nicole McKee, the country’s associate justice minister, said outlawing the machines would make it “more difficult for criminals to convert cash to high-risk assets such as cryptocurrencies.”
The post Bitcoin ATMs Clustered in Black, Latino and Low-Income Neighborhoods appeared first on PYMNTS.com.