NASAA Cautions Consumers On Bitcoin ATMs

Bitcoin ATMs are fairly common in major US markets. Coin ATM Radar currently tracks around 19,400 locations nationwide. At its peak, estimates placed Bitcoin ATMs at over 30,000 locations. While not on the level of bank ATMs, that is still quite a lot. Still, some states have pressured operators, with some even banning the machines. One large operator filed for bankruptcy in May, with their machines going dark in the process.

KYC demands/compliance, fees, and the reality of physical locations have reduced the popularity of these machines. It’s often less onerous to buy BTC through a crypto exchange or digital wallet, all on your smartphone.

Even as Bitcoin ATMs decline, the North American Securities Administrators Association (NASAA) has warned consumers to view these operations with caution. The “investor alert” provides a bulleted list of reasons why consumers may want to steer clear of buying Bitcoin at these kiosks.

NASAA declares:

• Almost Everywhere: BTMs let customers exchange cash for cryptocurrency, either by purchasing cryptocurrency with cash or (in bidirectional machines) withdrawing cash in exchange for surrendering cryptocurrency. Tens of thousands of BTMs are across North America, often located in high-traffic local businesses. Once a transaction is executed, it can be nearly impossible to undo, which makes BTMs highly attractive to fraudsters.
• Crypto Gateway: A report from a crypto kiosk company found that 74% of users made their first crypto transaction through a crypto kiosk.
• Rampant Fraud: According to the Federal Bureau of Investigation’s 2025 Internet Crimes Report, fraud involving crypto kiosks has increased exponentially to $390 million in the United States, a 58% increase in losses from 2024. Similarly, the District of Columbia Attorney General found that 93% of deposits flowing into a crypto kiosk in D.C. were scams. BTM frauds typically involve a scammer convincing a targeted individual to send cryptocurrency through the BTM to a cryptocurrency wallet the scammer controls (though some fraudsters have hacked into crypto kiosks or BTM networks directly and stolen cryptocurrency flowing through these platforms).
• Crypto Fees: BTM companies are making money – lots of it. Operators price transaction fees anywhere from 4% to more than 20% of the transfer amount. Smaller or independent operators often set higher fees because they handle fewer transactions and need to make more money on less volume, while encountering more liquidity and compliance risks than larger networks. Fees can also depend on the type of cryptocurrency being transferred.\Hidden Costs: Many machines do not describe how fees are broken down before the customer confirms the transaction. This makes it difficult for the customer to tell where extra charges come from. Hidden fees can include “mining fees,” “network fees,” additional withdrawal fees for selling cryptocurrency, and rounding errors when cryptocurrency is converted to fiat for withdrawal.

Beyond the potential for fraud and fees, as Bitcoin goes mainstream, it is becoming easier to buy or sell the world’s most popular crypto. It would not be surprising to see traditional banks add Bitcoin as an option for traditional ATMs in the future, alongside dollar-based transactions (and probably sky-high fees).