The bitcoin ATM has emerged as one of cryptocurrency’s biggest threats

Published

1 year ago

September 8, 2024

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Bitcoin ATMs are a rapidly growing presence in the United States and, some experts say, a rapidly growing cybercrime menace. ATMs dealing in bitcoin are similar to their cash cousins: there are PINs to punch and withdrawal fees, just like any other ATM.

Unlike cash ATMs, though, the high value of crypto makes them prime targets for hackers. So, while a cash ATM tucked away between the snack cakes and energy drinks at a gas station may not draw much attention, a bitcoin ATM gets more scrutiny from bad actors.

“It’s clear that these machines are particularly vulnerable to both physical and cyber threats, making them a prime target for hackers and thieves,” said Timothy Bates, clinical professor of cybersecurity at the University of Michigan’s College of Innovation and Technology.

Bitcoin ATMs can be susceptible to attacks where hackers install malware on the machines to capture private keys, steal funds, or manipulate transactions, which Bates said is “especially concerning for ATMs that may not receive regular software updates or security patches.” Network vulnerabilities are also a weak spot. “If the machine’s network communications are not adequately secured, attackers can intercept data transfers between the ATM and the server, leading to data theft or unauthorized access,” Bates said.

Whether it’s hackers or scammers, the government is sounding the alarm about bitcoin ATMs. The Federal Trade Commission reported this week that scam incidents have risen by 1,000% since 2020.

Ironically, a bitcoin ATM’s risks are directly related to its strengths, according to Joe Dobson, principal analyst at Mandiant, a Google Cloud-owned cybersecurity company. Bitcoin is decentralized, permission-less, and immutable. “A transaction cannot be reversed or recalled if funds are deposited to the wrong address,” Dobson said. And while many crypto bulls find bitcoin’s lack of governance appealing, that can be problematic in ATMs. “There is no governing body within bitcoin dictating who can or cannot run a bitcoin ATM, hence many independent organizations operate the ATMs,” Dobson said.

There are also old criminal tricks that might be reversible in a traditional banking situation, but in the world of bitcoin, that is not so. For example, someone could maliciously slip their personal deposit slips into the stack at the bank, tricking folks into depositing money into their account. “A similar attack can happen with bitcoin ATMs,” Dobson said. “If an attacker compromises a bitcoin ATM, they may change the receiving wallet address (or ‘account number’), effectively stealing user funds.”

But in addition to old tricks, there are newer threats bitcoin ATMs introduce that cash ATMs do not face. Many bitcoin ATMs require personally identifiable information, such as an ID or even a Social Security number to comply with financial industry Know Your Customer (KYC) requirements. This information could be at risk if a bitcoin ATM is compromised.

In Middletown, Ohio, at the Middletown Food Mart in a hollowed-out end of town, a Bitcoin Depot ATM sits opposite a regular cash ATM, blending in among the potato chips, bottled water, and beer. Middletown’s claim to fame lately is as the hometown of Donald Trump’s running mate Ohio Senator J.D. Vance, who has refashioned himself, similar to Trump, as a pro-cryptocurrency warrior. The Middletown Food Mart sits across the street from where Vance grew up.

‘Elon Musk told me to do it.’

Sai Patel, whose family owns Middletown Food Mart, says the bitcoin ATM isn’t very busy.

“Maybe once a month someone comes in to use it,” Patel said. And if it is someone new, Patel will patiently explain how the machine works. He also keeps an eye out for unusual activity. Although the bitcoin ATM isn’t exactly drawing crowds, Patel says a surprising number of senior citizens show up at the kiosk, alarming given the rise of bitcoin ATM scams targeting seniors.

“Elderly people come in and use it,” Patel said.

He described one encounter where an elderly woman entered his shop and headed for the bitcoin ATM, then attempted to send a lot of money somewhere but had questions about using the machine. When Patel asked the woman a few questions as to why, she said, “Elon Musk told me to do it.” Patel quickly realized she had fallen prey to a scam. “I told her, no, no, no, it’s a scam,” Patel said, and he stopped her from dumping her life savings into the machine.

Alice Frei, head of security and compliance at blockchain communications & consulting agency Outset PR, says bitcoin ATM fraud is costly, enhanced by the sometimes shadowy world of crypto.

“Cryptocurrencies are easily exchanged online, often without clear identification of the parties involved. Criminals exploit this anonymity and move money almost invisibly, often employing techniques such as cross-blockchain ‘bridges’ to further obscure transactions,” she said.

And then there’s the fact that an ATM scam probably doesn’t originate in the town where it occurs. “Many crypto exchanges involved in these activities are based offshore, beyond the reach of regulators, making it difficult to trace and recover stolen funds,” Frei added.

Basic steps to avoid bitcoin ATM scams

To protect against these scams, users should be cautious and skeptical of any request to pay through a bitcoin ATM. Legitimate businesses rarely, if ever, demand payment in bitcoin through a machine.

“Verifying the legitimacy of a transaction, particularly checking the recipient’s wallet for connections to questionable entities is crucial,” Frei said, adding that users should also use licensed ATMs from reputable operators to reduce the risk.

Frei said there are steps that users can take to verify the ownership and legitimacy of a bitcoin ATM or parties involved in transactions.

“You can verify the recipient address by checking for flagged activity on platforms like Chainabuse and running an AML check on the address using available tools,” she said, If these tools show the risk score above 70%, it’s advisable to avoid sending money. “Instead, contact the ATM operator or the person who provided the address to clarify the situation,” Frei added.

According to Frei, data shows that nearly 74% of ATMs globally are managed by just 10 operators.

The largest operator of bitcoin ATMs, Bitcoin Depot, operates over 8,000 ATMs. Its CEO Brandon Mintz says the company’s machines are designed to deter hackers. But he also disputes the claims that bitcoin ATMs are major hacking targets.

“Bitcoin ATMs aren’t typically high-priority targets for cybercriminals due to the separation of the hardware and the bitcoin wallet environments,” Mintz said. Bitcoin Depot does not store any bitcoin locally at a bitcoin ATM, and there are many layers of verification and approval processes that prevent unauthorized access to the Bitcoin Depot wallet, he said.

Additionally, Mintz said, most bitcoin ATMs, including Bitcoin Depot’s, only accept cash, so this removes the ability for criminals to use card skimmers like they can install on traditional cash ATMs. However, he says users do need to be aware of scams, and some of the same basic protocols that protect consumers from old-fashioned financial scams apply to the world of cryptocurrency as well.

“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.

As the market leader, Bitcoin Depot has been a target of litigation and the company disclosed in its S-1 filing before going public that its users “have been and could be targeted in cybersecurity incidents like an account takeover.” A South Carolina woman sued Bitcoin Depot after falling victim to an alleged cryptocurrency scam. In another instance, authorities in Texas intervened to return money from a Bitcoin Depot ATM after a woman fell victim to a scam.

And that points to a central irony of bitcoin and the bitcoin ATM, products of technology, but ones where the most powerful weapon against fraud isn’t more technology but responsibility, Dobson said. “User responsibility is paramount in cryptocurrency. There is little recompense if something goes awry. The onus is largely on the user to take steps.”

Technology

Nvidia’s beat and raise should wow even its most hardened critics, and the stock soars

Published

4 hours ago

November 20, 2025

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Nvidia's beat and raise should wow even its most hardened critics, and the stock soars

Technology

Nvidia CEO Jensen Huang rejects talk of AI bubble: ‘We see something very different’

Published

6 hours ago

November 20, 2025

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Nvidia CEO Jensen Huang rejects talk of AI bubble: 'We see something very different'

Jensen Huang, chief executive officer of Nvidia Corp., during the US-Saudi Investment Forum at the Kennedy Center in Washington, DC, US, on Wednesday, Nov. 19, 2025.

Stefani Reynolds | Bloomberg | Getty Images

In the weeks leading up to Nvidia’s third-quarter earnings report, investors debated whether the markets were in an AI bubble, fretting over the massive sums being committed to building data centers and whether they could provide a long-term return on investment.

During Wednesday’s earnings call with analysts, Nvidia CEO Jensen Huang began his comments by rejecting that premise.

“There’s been a lot of talk about an AI bubble,” Huang said. “From our vantage point we see something very different.”

In many respects, Huang’s remarks are to be expected. He’s leading the company at the heart of the artificial intelligence boom, and has built its market cap to $4.5 trillion because of soaring demand for Nvidia’s graphics processing units.

Huang’s smackdown of bubble talk matters because Nvidia counts every major cloud provider — Amazon, Microsoft, Google, and Oracle — as a customer. Most of the major AI model developers, including OpenAI, Anthropic, xAI and Meta, are also big buyers of Nvidia GPUs.

Reversing the slide

In its earnings release, Nvidia reported revenue and profit that sailed past estimates and issued better-than-expected guidance. Last month, Huang provided a $500 billion forecast for sales of the company’s AI chips over calendar 2025 and 2026.

The company said on Wednesday that its order backlog didn’t even include a few recent deals, like an agreement with Anthropic that was announced this week or the expansion of a deal with Saudi Arabia.

Nvidia's revenue is bigger story than gross margins moving forward, says Susquehanna's Chris Rolland

“The number will grow,” CFO Colette Kress said on the call, saying the company was on track to hit the forecast.

Prior to Wednesday’s results, Nvidia shares were down about 8% this month. Other stocks tied to the AI have gotten hit even harder, with CoreWeave plunging 44% in November, Oracle dropping 14% and Palantir falling 17%.

Some of the worry on Wall Street has been tied to the debt that certain companies have used to finance their infrastructure buildouts.

“Our customers’ financing is up to them,” Huang said.

Specific to Nvidia, investors have raised concerns in recent weeks about how much of the company’s sales were going to a small number of hyperscalers.

Last month, Microsoft, Meta, Amazon and Alphabet all lifted their forecasts for capital expenditures due to their AI buildouts, and now collectively expect to spend more than $380 billion this year.

Huang said that even without a new business model, Nvidia’s chips boost hyperscaler revenue, because they power recommendation systems for short videos, books, and ads.

People will soon start appreciating what’s happening underneath the surface of the AI boom, Huang said, versus “the simplistic view of what’s happening to capex and investment.”

WATCH: Nvidia posts Q3 beat

Nvidia posts Q3 beat, CEO Huang says Blackwell chip sales 'off the charts'

Technology

Asian chip names rally as Nvidia forecasts hotter-than-expected sales after earnings beat

Published

6 hours ago

November 20, 2025

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Asian chip names rally as Nvidia forecasts hotter-than-expected sales after earnings beat

C. C. Wei, chief executive officer of Taiwan Semiconductor Manufacturing Co. (TSMC), left, and Jensen Huang, chief executive officer of Nvidia Corp., during the TSMC sports day event in Hsinchu, Taiwan, on Saturday, Nov. 8, 2025.

Bloomberg | Bloomberg | Getty Images

Asian chip stocks rallied in early trading Thursday after American AI chip darling Nvidia beat Wall Street expectations and issued stronger-than-expected guidance for the fourth quarter.

South Korea’s SK Hynix popped around 4%. The memory chip maker is Nvidia’s top supplier of high-bandwidth memory used in AI applications.

Samsung Electronics, which also supplies Nvidia with memory, was also up nearly 4%. The company has been working to catch up to SK Hynix in high-bandwidth memory to land more contracts with Nvidia.

Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, which produces most of Nvidia’s chip designs, rose 4% in Taipei.

“We expect Nvidia’s results to drive higher earnings estimates across the sector, including for its primary GPU supplier TSMC, memory vendors SK Hynix and Samsung, and the broader Asian subcomponent and assembly value chain,” Rolf Bulk, equity research analyst at New Street Research, told CNBC.

In Tokyo, Renesas Electronics, a key Nvidia supplier, added about 4%. Tokyo Electron, which provides essential chipmaking equipment to foundries that manufacture Nvidia’s chips, gained 5.87%. Another Japanese chip equipment maker, Lasertec, was up about 6%.

Japanese tech conglomerate SoftBank skyrocketed nearly 7%, though the firm recently offloaded its shares of Nvidia. Softbank owns the majority of British semiconductor company Arm, which supplies Nvidia with chip architecture and designs.

SoftBank is also involved in a number of AI ventures that use Nvidia’s technology, including the $500 billion Stargate project for data centers in the U.S.

Nvidia’s sales and outlook are closely watched by the technology industry as a sign of the health of the AI boom, and its strong earnings could ease recent fears regarding an AI bubble.

“There’s been a lot of talk about an AI bubble,” Nvidia CEO Jensen Huang told investors on an earnings call. “From our vantage point, we see something very different.”