The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a notice on Aug. 4, warning that convertible virtual currency (CVC) kiosks are increasingly being leveraged for fraud, money laundering, and scams targeting vulnerable populations. The notice explains that these kiosks, also known as crypto ATMs, which enable fiat-to-digital currency exchanges, are being used by transnational criminal organizations and scammers to move illicit funds quickly and often anonymously. FinCEN urged financial institutions to increase monitoring of suspicious activity and emphasized the use of Suspicious Activity Reports (SARs).

FinCEN Director Andrea Gacki stated:

Criminals are relentless in their efforts to steal money from victims, and they’ve learned to exploit innovative technologies like CVC kiosks.

“The United States is committed to safeguarding the digital asset ecosystem for legitimate businesses and consumers, and financial institutions are a critical partner in that effort. This Notice supports Treasury’s continuing mission to counter fraud and other illicit activities,” the FinCEN director added.

According to the FBI’s Internet Crime Complaint Center, fraud complaints involving CVC kiosks nearly doubled in 2024, reaching 10,956 cases and $246.7 million in reported losses. Elder abuse was a key concern, with those aged 60 and over suffering more than two-thirds of all losses linked to kiosk-based scams.

Widespread non-compliance by CVC kiosk operators has exacerbated these issues. FinCEN identified a pattern of failures to register as money services businesses and implement anti-money laundering controls, enabling transactions without proper customer due diligence. Drug trafficking networks, notably Cartel Jalisco Nueva Generación, have utilized these kiosks to launder proceeds from narcotics sales, especially in high-risk regions like Illinois. Despite these challenges, industry proponents contend that with robust compliance frameworks, kiosks can support crypto adoption and financial inclusion while minimizing abuse.

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