Last year, Americans lost $333 million due to cryptocurrency ATM fraud. These staggering numbers are at the heart of why Bitcoin Depot, the country’s largest Bitcoin ATM operator, is making major changes to the way it does business. This change will affect anyone who visits that machine.
Starting this February, the company began requiring customers to show identification when they first sign up, as well as before completing any transaction. No ID, no Bitcoin. It’s that simple.
A history of half measures.
It’s not like Bitcoin Depot hasn’t tried to tackle fraud before. In October 2025, the company introduced identity verification for new users signing up to the platform. But what about returning customers? They were able to continue the transaction without further investigation. Critics say the gap is large enough for bad actors to get away, and the numbers show they have done exactly that.
Looking at FBI data on cryptocurrency ATM-related fraud losses last year, the scale of the problem becomes impossible to ignore. Scammers, who mostly target older Americans, have perfected a shocking routine. They coach victims into providing cash to Bitcoin ATMs under false pretenses, including false government notices and fake technical support calls, and then disappear when the money is gone. Because Bitcoin transactions are irreversible, victims are left with virtually nothing.
Legal heat in all directions
Bitcoin Depot didn’t just deal with bad headlines. I have been dealing with a lawyer. Massachusetts Attorney General Andrea Campbell filed a lawsuit against the company this month, alleging that it knowingly allowed cryptocurrency fraud to occur by eliminating anti-fraud measures.
Campbell’s office asked the court to block Bitcoin Depot from accepting transactions over $10,000 unless additional fraud prevention measures were taken.
Maine told a different story, one with a price tag attached. The company reached a $1.9 million settlement with the state’s consumer credit bureau after agreeing to return money to fraud victims. And in a somewhat controversial ruling, the Iowa Supreme Court ruled that Bitcoin Depots are legally allowed to deposit cash through fraud because they have to verify that customers own the receiving wallet.
According to the report, at least 17 states in the U.S. have passed laws requiring better protections for cryptocurrency ATMs, including daily spending limits and clearer fraud warnings posted on the devices.
9,000 machines, one new rule
Bitcoin Depot’s reach is enormous. According to the report, the company operates more than 9,000 kiosks across North America and is the dominant player in the U.S. market, accounting for 78% of all Bitcoin ATMs globally. That’s a total of more than 31,000 machines, based on data from Coin ATM Radar.
CEO Scott Buchanan framed the new ID policy as a security upgrade rather than just a legal safeguard. “We are taking additional steps to enhance security, protect our customers and maintain the integrity of our services by requiring identity verification for all transactions,” he said.
The company says continuous verification can flag suspicious behavior associated with specific customers, locations or amounts before a transaction is even approved.
Featured image from Unsplash, chart from TradingView
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