Clay County Scammed Millions in Bitcoin, Tracing Proves Difficult
In the past two years, Clay County has witnessed a staggering loss of $3 million due to cryptocurrency ATM scams, affecting 156 individuals. Clay County Prosecutor Zach Thompson highlighted the alarming trend, stating that these scams, though rooted in long-standing deception practices, have adapted to modern financial technology.
Scam Tactics and Victimization
Scammers often impersonate officials, claiming victims have missed jury duty and face arrest warrants. They instruct victims to transfer money through Bitcoin kiosks, or Bitcoin Terminals (BTMs), instead of using traditional money orders or gift cards. These machines, which look like standard ATMs, allow users to buy and sell cryptocurrency easily, often without needing a bank account.
Thompson pointed out that Bitcoin transactions are nearly instantaneous and extremely difficult to trace, complicating law enforcement efforts. As a result, not a single suspect has been apprehended in any of the 156 cases reported.
Recent Case Illustrates the Threat
A distressing case occurred in October when a 67-year-old woman received a fraudulent call from someone claiming to be from the sheriff’s office. Following instructions to withdraw $9,000 from her bank, she was misled into using a Bitcoin ATM. After making her first transaction, she was convinced to withdraw an additional $5,000, all while being warned not to alert bank staff or law enforcement.
Growing National Concern
Nationwide, scams involving cryptocurrency kiosks have skyrocketed. In 2024, fraud losses surpassed $107 million, marking a 31% increase from 2023, according to the FBI. The Federal Reserve Bank of Kansas City reported that victims are usually guided to use a QR code linked to the scammer’s digital wallet. Funds sent in this manner are often unrecoverable.
- BTMs must comply with anti-money laundering rules, but many operators do not.
- The St. Paul city council plans to ban cryptocurrency kiosks on December 21 due to the prevalence of scams targeting vulnerable populations.
- Clay County is taking action by creating awareness flyers to be posted on kiosks, advising potential victims to recognize scam attempts.
Demographics of Victims
The FBI reports that the majority of BTM scam victims are individuals over 60, who are victimized at double the rate of younger people. However, the fastest-growing segment includes students, who are increasingly falling prey to online scams aimed at helping with student loans or offering unrealistic deals.
With 60 cryptocurrency machines in Clay County, primarily located in convenience stores and gas stations, the issue remains a significant concern. Efforts to raise awareness and implement preventive measures must continue to combat this rising threat.
