An elderly man from Forest Lake lost nearly $1 million after being deceived by scammers who convinced him to withdraw money from his bank and use it at a cryptocurrency ATM.
Another local resident reported a loss of $600,000 before realizing they were falling victim to a scam.
“It’s unfortunate. Victims panic, become fixated, and lose their sense of rationale,” stated Det. Nathan Olstad from the Forest Lake Police Department.
According to Olstad, once cash is deposited into a cryptocurrency ATM, recovering funds becomes incredibly challenging.
The Forest Lake City Council plans to vote on a new ordinance next week aimed at preventing future scams. This ordinance would mandate that all cryptocurrency ATMs in the city be registered.
Understanding Cryptocurrency ATMs
Cryptocurrency ATMs resemble traditional ATMs, but they are specifically designed for cryptocurrency transactions, allowing users to withdraw from their cryptocurrency accounts or purchase cryptocurrency. The Federal Trade Commission notes that people turn to cryptocurrency for various reasons, including quick payments and the avoidance of traditional bank fees. However, once a transaction is made using cryptocurrency, it is generally only recoverable if the recipient agrees to send it back.
In 2023, fraud related to cryptocurrency cost Americans an estimated $5.6 billion, according to the FBI.
New Registration Requirements
The forthcoming ordinance in Forest Lake would require business owners hosting cryptocurrency ATMs to register each machine, fill out an application, pay a $2,000 fee, and submit proof from the Forest Lake Police Department confirming there have been no more than two substantiated fraud instances involving any of the operator’s kiosks in the past six months.
“If you have a history of misconduct, you will be barred from operating here,” Johnson explained, adding that those who maintain a clean record can continue to operate. Additional registration conditions include displaying a city-provided fraud warning sign, installing a closed-circuit camera per police specifications, and agreeing to provide video footage to authorities within 48 hours upon request.
Recent Scam Cases
In 2023 and 2024, residents reported losses totaling $300,000 due to scams involving cryptocurrency ATMs, with many victims being elderly individuals, according to Olstad. One recent case involved a woman who was about to deposit $16,000 into a Bitcoin Depot ATM after being misled by scammers about a supposed virus on her computer.
Officials in two other Washington County cities are developing protection measures against cryptocurrency ATM scams. Woodbury is contemplating a registration ordinance similar to Forest Lake’s, while Stillwater’s City Council is moving towards a ban on crypto ATMs.
The Forest Lake City Council is scheduled to vote on this proposed ordinance on Monday.
Originally Published:
