By Sonya Sellmeyer, Consumer Advocacy Officer for the Iowe Insurance Division

Cryptocurrency is a digital or virtual currency not regulated by a bank or financial institution and may be used for purchases or investments. Cryptocurrency automatic teller machines (ATMs) work like a bank or credit union ATM and convert traditional currency into cryptocurrency for a fee, but scammers are using these machines to exploit Iowans. 

The FBI issued a public service announcement alerting the public about the increase of these scams and described the various tactics being used to steal money with a cryptocurrency ATM.  One tactic being used in Iowa is a romance scam.  The victim meets a romantic interest online or on a dating app, gains the victim’s trust, then makes a request for money due to a medical emergency, legal fees, or other emotional and urgent plea that tugs at your heartstrings.  The scammer then requests the funds be deposited at a cryptocurrency ATM into a crypto wallet address provided by the scammer, that the victim does not control.  Once you deposit money into an uncontrolled cryptocurrency wallet, the money is gone.  

A second tactic is an investment opportunity that promises astronomical returns.  These interactions can begin as a simple text message or email, but the scammer will often direct the victim to use an online message platform such as WhatsApp or Telegram to continue the dialog.  After the victim makes an investment which appears to be earning the promised returns additional funds will be requested.  The scammer then directs the victim to place the investment money into a cryptocurrency ATM. Again, the digital wallet is controlled by the scammer and the money is gone.  

Cryptocurrency ATMs generally operate without regulatory oversight, often do not have to follow money transmission law, and may contain a disclaimer stating the ATMs owners are not able to offer assistance with obtaining any funds after the cash is entered into the ATM.  Remember with cryptocurrency, once the virtual currency leaves your wallet, it is out of your control.  

Avoid being a victim by following these simple rules: 

  • Stop. Think. Call.  Discuss non-traditional investments or the request for money with a trusted source
  • Double check before you invest. Ensure anyone trying to sell you an investment is properly licensed as well as the investment being sold.
  • Be cautious posting on social media or dating sites, and beware of online investment solicitations.  Don’t click on links in emails or text messages.
  • Never give out your personal banking information or send money to someone you don’t know, especially if you haven’t met in person.
  • Research the online profile and picture to see if it has been used elsewhere or on multiple online profiles.
  • Beware of someone trying to isolate you from your friends and family.
  • If an investment pulls at your heartstrings, walk away.

If you suspect you have been the victim of a scam, stop communicating with the person immediately.  Block them on all communication platforms, but save screenshots of any conversations, copies of documents, and instructions on sending the money.  Report all cryptocurrency ATM scams to local law enforcement and the Internet Crime Complaint Center (IC3).  If the cryptocurrency scam involves an investment, please call the Iowa Insurance Division at 515-654-6600. 

The Iowa Fraud Fighter program is a source of information to shield your savings from scammers.  Remember, if it sounds too good to be true, it is!