California Woman Falls Victim to Scam, Nearly $70,000 Transferred to Fraudsters via Crypto ATM

Danielle White, a special education teacher from Berkeley, California, fell victim to a scam months ago after receiving a call from fraudsters posing as police officers. She lost tens of thousands of dollars, with crypto ATMs unexpectedly aiding the scammers.

In October, White received a call from someone claiming to be from the Oakland Police. The caller stated the conversation was being recorded for mutual safety, provided a "badge number," and claimed White was supposed to appear in court as a juror but had failed to show up.

These alleged officers claimed to possess signed documents confirming White's jury assignment, with the associated address matching her former residence in Oakland. The scammers asserted that multiple citations were under her name, stating she could resolve the matter at the police station but must first pay thousands of dollars to "freeze" the citations. They threatened that if White visited the station without settling the fees, she would be arrested and face three days of detention.

For someone facing detention, buying freedom with money seemed like a good option. The scammers also restricted her from communicating with anyone other than the "police," forbidding her to hang up the phone even overnight.

The caller guided White to withdraw tens of thousands of dollars from her bank account. She then deposited the funds in batches of thousands into crypto ATMs, transferring the money to the fraudsters via QR codes. Within just 27 hours, the scammers swindled nearly $70,000.

Two of the crypto ATMs the scammers directed the victim to use belonged to CoinFlip, while another was operated by Bitcoin Depot.

A CoinFlip spokesperson stated via email that the company was "saddened to hear about this experience." The firm also indicated it would refund transaction fees to victims, which ranged from 5% to 22% of the transaction value.

Local regulations limit daily deposits and withdrawals per user at the same crypto ATM to $1,000. This was why the scammers instructed White to make multiple deposits.

Earlier this summer, U.S. authorities fined crypto ATM operator Coinme $300,000 for violating transaction limits and other regulatory violations. Authorities ordered the company to reimburse a victim $51,700, whose experience mirrored White's scam.

BrokersView reminds you

As Crypto ATMs increasingly facilitate money laundering, UK regulator has banned this kind of machines; in September, the U.S. Securities and Exchange Commission charged crypto ATM operator Athena with aiding and profiting from fraud.

If you have encountered similar scams, you can report them through BrokersView to help protect other investors from falling into the same traps.