Scammers are always looking for a target, and one of the latest ones involves virtual currency kiosks.
At the October 7 meeting, the commission approved, on first reading, an ordinance titled “Convertible Virtual Currency Kiosks” to prohibit these kiosks in certain places. The city’s code compliance department, not the police department, will enforce the ordinance.
The ordinance prohibits operating convertible virtual currency kiosks, also known as crypto ATMs, within Coral Springs. These kiosks already exist in various businesses throughout the city, mostly in gas stations, convenience stores, smoke shops, and the mall, according to Detective Chad Whittington.
“As of last week, I am aware of 14 currently operating in our city, but the number fluctuates, and there were 19 earlier this year. These kiosks are owned and operated by private companies such as Bitcoin Depot, CoinHub, Athena Bitcoin, and CoinFlip that pay “rent” to the local business for permission to place their crypto ATM within the business,” said Whittington.
Crypto ATMs have become a preferred payment method amid the fraud and scams the Coral Springs Police Department has been receiving cases about. Scammers take advantage of victims unfamiliar with cryptocurrency and convince them to deposit cash into these kiosks, which then convert the cash into crypto, minus a percentage fee for the operating company, according to Whittington.
The crypto is then sent to a digital wallet controlled by the suspect using a QR code that the suspect provides to the victim to scan at the kiosk. Once the crypto is sent out, it is virtually impossible to recover or even identify who or where it ultimately ended up. These scams disproportionately target older people because they often lack technological knowledge. Recent investigations by the Attorneys General in Iowa and Washington, D.C., revealed that 93%-95% of transactions conducted at crypto ATMs in their jurisdictions result from fraud. Those investigations found that the kiosks provide little to no legitimate value, according to Whittington.
“By removing these kiosks from our city, it will make it harder for scammers to victimize our citizens. We are hoping that other municipalities will follow our lead and do similarly, which will make it exponentially harder for citizens in the area to fall victim to scammers trying to use these machines as part of their plan,” said Whittington.
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