Bitcoin Address and Crypto ATM Scam Costs Users $70 Million

Cryptocurrency traders are increasingly targeted by sophisticated scams, leading to significant losses. Scammers have pulled off everything from large Bitcoin thefts to tricky crypto ATM schemes. These indicate growing risks in the digital currency market.

As cryptocurrencies become more popular, they also become prime targets for scams. These scams take advantage of the complex nature of crypto transactions.

Victims Lose Over $70 Million in Bitcoin, Crypto Scams

A Bitcoin trader mistakenly sent a whopping $69.3 million to a scam address. This “address poisoning” scam was confirmed by blockchain security firm CertiK. In this scam, criminals make fake crypto addresses. As a result, the trader’s assets on Coinbase crashed by nearly 97%, leaving only $1.6 million in their wallet.

Address poisoning involves scammers sending small sums to real users’ accounts. This tricks them into making errors in future transactions. Since blockchain transactions are public, it’s easier for scammers to pull off these schemes.

Meanwhile, the spike in cryptocurrency-related scams shows no signs of slowing. According to the FBI’s 2023 Internet crime report, these scams drained $3.94 billion from investors, making up most of the year’s investment scam losses.

Cryptocurrency platforms like Trezor advise users to double-check addresses. It conducts test transactions before sending large amounts to fend off such scams.

“The most important step in avoiding this type of scam is to thoroughly verify and double-check the address before confirming the transaction. This is crucial for all transactions, especially when sending assets of significant value. The only way to ensure safety is to carefully check every character of the address,” Trezor wrote. 

Read More: How To Identify a Scam Crypto Project

On another front, the Denver Police Department has warned about a growing scam involving cryptocurrency ATMs. Per the police, scammers masquerading as officials deceived a woman into believing she had missed a court appearance and had a pending arrest warrant. 

Coerced into avoiding alleged jail time, she was instructed to deposit “bail” money using a cryptocurrency option at a self-service banking kiosk. Tragically, she lost $14,000 before realizing it was a scam.

These incidents highlight a growing challenge within the crypto community and beyond — identifying and avoiding scams. Experts stress the importance of vigilance and skepticism, particularly with transactions requiring cryptocurrency, as scammers continually evolve their tactics to exploit unsuspecting victims.