#economy: Warning issued over crypto ATM scams as Kiwis lose tens of thousands

The Banking Ombudsman is urging people across Aotearoa to be extremely cautious after a series of scam cases involving cryptocurrency ATMs has left victims out of pocket by tens of thousands of dollars.

Crypto ATMs, which allow users to deposit cash and convert it into cryptocurrency sent to a digital wallet, are increasingly being used by scammers. Once a transaction is completed, the money is transferred almost instantly and is very difficult to trace or recover.

Banking Ombudsman Nicola Sladden says the speed and anonymity of these transactions make them particularly dangerous when individuals are being pressured or manipulated.

Recent investigations highlight how convincing these scams can be. In one case, a woman responded to what appeared to be a legitimate job advertisement. She withdrew $31,500 from her bank account, telling her bank she was purchasing a vehicle, before depositing the cash into a crypto ATM. The funds were immediately transferred to a scammer and could not be retrieved. Full details of the case are available here: https://bankomb.org.nz/guides-and-cases/case-notes/98063

In another case, a man was drawn into what he believed was a genuine job opportunity over a six-month period. He ultimately withdrew and deposited nearly $65,000 through crypto ATMs, believing he was investing his money. That case can be read here: https://bankomb.org.nz/guides-and-cases/case-notes/98451

In both situations, the victims believed they were acting on legitimate instructions, underscoring how sophisticated and persistent these scams have become.

Authorities are particularly concerned about the growing use of crypto ATMs in financial crime. International consumer advocates have warned about their role in enabling scams and have called for stronger action, including potential bans. More on those concerns can be found here: https://consumeraction.org.au/opinion-ban-crypto-atms-end-robbery-in-plain-sight/

In New Zealand, the Government has signalled it is examining options to better regulate or restrict the use of crypto ATMs as part of wider efforts to target organised financial crime. Further information is available at: https://www.beehive.govt.nz/release/targeting-criminals-not-kiwi-businesses

The Ombudsman’s office is warning that any request to withdraw cash and deposit it into a crypto ATM should be treated as a major red flag. Requests to keep transactions secret or to mislead a bank about the purpose of withdrawals are also clear warning signs.

Consumers are being encouraged to independently verify who they are dealing with and to seek advice from trusted whānau or friends before making any large or unusual payments.

With scammers continuing to evolve their tactics, the message is clear: take time, ask questions, and do not rush into financial decisions that cannot be undone.