In a significant move reflecting growing concern over the misuse of cryptocurrency infrastructure, the US Treasury Department issued a strong warning on August 4, urging financial institutions to monitor and report suspicious transactions involving crypto ATMs – also known as Convertible Virtual Currency (CVC) kiosks. These machines, which function similarly to traditional bank ATMs, enable users to convert physical cash into digital currencies and vice versa. While marketed as a convenient bridge to the digital economy, regulators and law enforcement agencies are increasingly alarmed by their exploitation in criminal enterprises, from drug trafficking to elaborate financial scams.

The Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury, released its first formal notice specifically targeting these kiosks. It underscores what experts have long feared: the unregulated nature of crypto kiosks has made them a hotbed for money laundering, fraud, and exploitation – particularly targeting vulnerable populations such as seniors.

FinCEN’s alert comes on the heels of a July 2024 investigation by the Organized Crime and Corruption Reporting Project (OCCRP), which revealed how criminal networks – both domestic and international – are increasingly relying on crypto ATMs to obscure financial trails. The OCCRP report detailed how these kiosks are disproportionately located in lower-income neighborhoods, tucked away in gas stations, laundromats, and corner stores where oversight is minimal and foot traffic is heavy. Such locations are ideal for illicit transactions to occur unnoticed.

According to FinCEN’s August notice, the FBI’s Internet Crime Complaint Center (IC3) received 10,956 reports of criminal schemes involving crypto kiosks in 2024 alone.........

© Blitz