Cryptocurrency scams are rising in Colorado. Learn how to stay safe.

Key takeaways:

• Cryptocurrency scams are rising and create the risk of substantial financial losses. 
• Scammers use social engineering tactics to gain trust and manipulate emotions. 
• Never use cryptocurrency ATMs to make payments. 
• Talk to someone you trust if you suspect a scam. 
• Report fraud to your financial institutions and authorities. 
• Educate others to prevent future scams. 

In Colorado and across the country, scams associated with cryptocurrency ATMS (one type of these are Bitcoin ATMs) are increasing. Let’s talk about these scams, how to avoid them and what to do if you encounter them. 

Scams are rising as cryptocurrency ATMs increase 

Elevations sees multiple cryptocurrency ATM scams per week, a substantial increase. However, there may be many other incidents that go unreported because victims are ashamed they were taken advantage of.  

“We really do feel for these members. It’s heart-breaking to see that they’re losing these large amounts of money,” said Meredith Recen, enterprise fraud manager at Elevations. “Our main focus is education and seeing if someone can help them if this happens again in the future.” 

Higher amounts of funds lost 

According to the Federal Trade Commission, scams associated with cryptocurrency ATMs cost U.S. consumers over $110 million in 2023. That number continued to climb, with $65 million lost in just the first half of 2024. 

The money lost in an average cryptocurrency ATM scam is significantly higher than for other scams. At Elevations, staff prevented a member from being scammed out of amounts as high as $80,000.  

Other large amounts are reported after they’ve been sent. Since these ATMs are anonymous, it’s extremely difficult to recover funds once they’ve been sent. 

Increasing cryptocurrency ATMs  

In Colorado, the rising number of cryptocurrency ATMs creates greater opportunity for scams. The Colorado Sun reports that more than 500 cryptocurrency ATMs now operate across the state, many in lower-income ZIP codes and high-traffic locations like gas stations and liquor stores. 

When ATMs are in banks and credit unions, trained, experienced staff can often spot a scam and stop it before it happens. In locations like gas stations and liquor stores, those team members can’t protect consumers from potential scams. 

Keep reading to learn about cryptocurrency scams we’ve seen at Elevations. 

How many scams start 

Many scams, including cryptocurrency scams, begin through social engineering. Scammers manipulate your emotions and may use AI to help their writing sound natural and persuasive to gain your trust. 

1. Unexpected contact: An unsolicited text message, social media message or phone call comes from someone pretending to be: 
   • A person in a position of authority 
   • A new friend or love interest 

2. Urgent need for funds: The scammer creates a sense of fear or obligation by saying they need the money right away to resolve an issue, such as: 
   • A debt they claim you owe 
   • The need to make a transaction so they can investigate your financial institution 
   • Helping a loved one with a difficult situation 
   • Another urgent situation 

3. ATM deposit: The scammer asks you to withdraw cash and deposit it into a cryptocurrency ATM to resolve the situation.  

Real scams, real Coloradans 

Elevations staff have prevented these scams in branches before the members lost their money.  

1. The federal investigation scam 

Scammers often impersonate government officials, claiming to be investigating a financial institution.  

Victims are told they must withdraw funds and deposit them into a cryptocurrency ATM (such as a bitcoin ATM), often under threat of jail time. They’re also instructed not to speak to bank staff — a major red flag. 

How to spot it: 

• No investigator would ask you to lie to your financial institution. 
• No legitimate investigator will ask you to withdraw money or use a cryptocurrency ATM. 
• Always verify phone numbers and links before responding. Ask for help with this step if you need it. 

What to do: 

• Hang up immediately. 
• Contact your financial institution to report the scam. 

2. The romance scam 

In another case, a scammer posing as a romantic partner convinced a Colorado resident to use their home equity line of credit (HELOC) to invest in cryptocurrency. The victim believed they were about to get married.  

Fortunately, an Elevations staff member intervened just in time, showing the victim similar scam stories and saving them from losing $80,000. 

Why these scams work 

Cryptocurrency scammers often target: 

• Older adults 
• Low-income individuals 
• People unfamiliar with cryptocurrency 

They use people’s trust in authority figures and manipulate them through intimidation. And because cryptocurrency transactions are irreversible, it’s nearly impossible to recover funds lost in these scams. 

How to protect yourself 

Thankfully, Elevations has multiple avenues for protecting members, including: 

1. Advanced fraud monitoring technology  
2. Employee fraud training  
3. Dedicated fraud team  
4. A fund release form for major withdrawals: This informs the member of common scams, including those involving cryptocurrency, that involve large-scale loss of funds. 

However, you are the first and best defense against scams. Here are some key tips to avoid falling victim: 

Don’t use cryptocurrency ATMs to send payments. 

• These machines are anonymous, making it very difficult to recover funds. 
• Crypto ATMs are not meant for paying fines, taxes or investments. 
• If someone insists you use one of these machines, it’s almost certainly a scam. 

 Talk to someone you trust. 

Scammers often isolate victims. If you’re unsure if the situation is suspicious, speak to a friend, family member or Elevations staff. 

Because scams happen through emotional manipulation, simply talking to someone you trust could easily prevent funds from being stolen. Not to mention, it could help others spot a similar scam in the future. 

“We’re here to help and support you,” Recen said. “If something seems off, definitely reach out.” 

Report suspicious activity. 

Contact your bank or credit union right away if: 

• Someone is asking you to use a cryptocurrency ATM 

• You believe you may have been scammed 

Report all possible scams to the FTC and the Colorado Attorney General’s Office. 

Share information with loved ones. 

Talking about scams you’re seeing and tips to avoid them can help keep you and your loved ones safe. Having these conversations can also make you a trusted source of help in case someone close to you encounters a scam. 

The bottom line 

Cryptocurrency is here to stay — and so are the scammers. Education and vigilance are our best defenses. Remember: 

• If something feels off, it probably is. 

• Trust your instincts, and don’t be afraid to ask for help. 

To protect financial wellbeing in our community, Elevations offers complimentary seminars and webinars on avoiding scams and other forms of fraud. If you’d like us to come to your school, church, workplace or other location, let us know.