Brenda Smith didn’t know what a cryptocurrency ATM was before she was directed to deposit more than $12,000 cash into two of the machines last year as part of an elaborate cyber scam.
The 76-year-old Calgary retiree suffered a stroke a few months before that, which she says was affecting her cognitively.
“They’re so convincing, and unfortunately I was vulnerable,” Smith said.
“He did walk me through what to do, and so of course, I just deposited the money and never really gave it a second thought.”
Crypto ATMs might look a lot like a traditional banking machine, but instead of dispensing cash from your bank account, the majority of these machines allow customers to deposit cash and then convert it into cryptocurrency, like BitCoin. Then, they can send it to a virtual wallet anywhere in the world.
Smith has no idea where her money ended up.
“It was devastating, even though it was only $12,000,” she said. “When you’re a senior on pensions, that’s a lot of money.”
The first-ever crypto ATM was installed in a small Vancouver coffee shop back in 2013. At the time, the machine was hailed as a pioneer for innovation by offering a fast, accessible way to buy crypto. A dozen years later there are about 3,600 crypto ATMs across the country and more than 39,000 around the world — and authorities have mounting concerns about how the machines are being used and by whom.
WATCH | CBC investigation uncovers why crypto ATMs are so popular for fraudsters:
How fraudsters are using crypto ATMs to get your money
CBC News spent months looking into this industry, speaking with law enforcement, financial regulators, cryptocurrency experts, former crypto ATM company employees, the operators themselves and fraud victims for this three-part series Feeding Fraud: The Crypto ATM Problem.
The investigation revealed that these machines, which operate legally in Canada, have become the main vehicle fraudsters use to get money from scam victims across the country. Canada’s financial intelligence agency, FINTRAC, came to that conclusion in a February 2023 analysis of suspicious transactions reports submitted to the agency.
“FINTRAC judges that Bitcoin Automated Teller Machines (BATMs) will continue to be the primary method that domestic and international criminal perpetrators of fraud will use to obtain funds from their victims and to launder those proceeds within the cryptocurrency ecosystem,” reads the report CBC News recently obtained through an access to information request.
“It is highly likely that the number of Canadian victims targeted by organized fraud networks located in other countries will continue to rise. Criminal groups are developing innovative and sophisticated fraud campaigns to direct Canadians to place funds in BATMs.”
Despite those findings, FINTRAC isn’t keeping tabs on which companies operate these machines, how many they’re running or where they’re located in Canada. Instead, crypto ATM operators are classed as a “money services business,” a designation that includes foreign exchange dealers, regular ATMs and money-transfer services, like Western Union.
CBC News requested an interview with the head of FINTRAC for this series, but the request was denied. The financial intelligence agency’s written response did not answer CBC’s questions about what, if anything, FINTRAC has done to address the conclusions it came to in its two-year-old report.
Instead, the agency provided statistics on financial disclosures it provided to law enforcement investigations last year and included the legal obligations of money services businesses.
Under that designation, crypto ATM companies have to register with FINTRAC and are subject to a federal anti-money laundering law that requires them to submit reports for large cash transactions, suspicious transactions and to follow Know Your Customer (KYC) rules — such as verifying a person’s identity — for transactions over $1,000. But there are no rules governing certain aspects of the industry, such as the fees operators can charge or limits on the size of customer transactions.
Major police services like the RCMP, OPP and Toronto police aren’t tracking how much of the fraud reported to them involves the use of crypto ATMs.
The only national law enforcement group keeping those statistics appears to be the Canadian Anti-Fraud Centre (CAFC). Fraud victims reported losing $14.2 million to scams through crypto ATMs in 2024, and this year, losses are on pace to surpass that, with more than $4.2 million reported in the first three months of 2025.
But those numbers come with big caveats. CAFC estimates that only five to 10 per cent of fraud incidents are reported to it.
And its statistics don’t generally include police reports. They definitely don’t include Toronto police or OPP reports, according to Toronto police Det. David Coffey.
“They’re the tip of the iceberg — literally — I mean their tip may not even be out of the water yet,” said Coffey, who works in the financial crimes unit.
“They need to multiply it by 10 or 20 just to get a vague sense of the real damages.”
The detective says Toronto police receive fraud reports involving crypto ATMs daily, and the challenges investigating these cases can be “insurmountable.”
“As soon as it’s sent away, that money is across the globe,” he said. “Not only that, but the bad guys are across the globe … We simply, mostly, don’t have the resources or the authority, the jurisdiction, to get that money back or to bring those people to account. And that’s a really, really sad, regretful thing to say.”
Coffey and others in Canadian and international law enforcement told CBC News crypto ATMs are being used as a tool to get money in most grifts, from romance scams to impersonation ones, like the CRA scam.
“There has been a noticeable increase in the use of crypto ATMs to execute these crimes,” said Sgt. Gordie Jones, a national cryptocurrency co-ordinator for the RCMP.
Part of that trend could stem from the spread and resulting convenience of these machines.
Canada now has the most crypto ATMs per capita in the world, with nearly 91 per one million residents and the second-highest number of machines (behind the U.S.) per country, according to TRM Labs, a blockchain intelligence company.
From the beginning of this year through mid-August, the company found that crypto ATMs in Canada have processed almost $1.5 billion.
TRM has linked about $160,000 of that to illicit activity by mapping cryptocurrency wallets that have been linked to frauds and other forms of money laundering. But the company’s global head of policy says that’s likely a fraction of the true amount.
“The numbers are likely significantly higher, potentially 85 per cent higher, than what we’re seeing,” said Ari Redbord. “The challenge there is the reporting challenge that all law enforcement globally is having — and that is this is such a woefully underreported problem.”
So why have crypto ATMs become such an attractive tool for fraudsters?
Experts in the field say the appeal hinges on convenience and speed.
“People can now send remittances, humanitarian aid, cross-border faster and in larger amounts than ever before,” Redbord said. “The challenge though is bad actors also can now move funds cross-border at the speed of the internet.”
Andreas Park, a finance professor at the University of Toronto and co-founder of its blockchain research lab, points to accessibility: the machines don’t require customers to use a bank account and rarely use an authentication process other than a phone number for transactions under $1,000.
“The low barrier of using them and getting access to crypto assets is exactly what facilitates crime,” Park said.
The combination of those factors and the lack of human interaction in the transaction is what makes the machines attractive to scammers, said Coffey — as well as a knowledge gap when it comes to victims.
“They’re not evil themselves, but they’re a tool used by fraudsters to facilitate fraud,” the detective said of the crypto ATMs. “It’s easy, it’s fast, it’s irreversible … and they really, really prey upon vulnerable communities who don’t really understand what cryptocurrency is.”
In Smith’s case, the 76-year-old didn’t realize she’d been defrauded until she told her daughter, and then her daughter reviewed her finances.
“I just felt so stupid,” Smith said. “It was just like somebody had come into the house and just taken from me.”
TOMORROW: Part two of Feeding Fraud: The Crypto ATM Problem will dig into the companies behind these machines in Canada, how they turn a profit, and what they’re doing to try and prevent fraud.
