WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) has issued a notice urging financial institutions to remain alert and report any suspicious activity related to convertible virtual currency (CVC) kiosks.
CVC kiosks—also called cryptocurrency automated teller machines—are ATM-like devices or electronic terminals that allow customers to exchange real (or fiat) currency for virtual currency and vice versa.
“While CVC kiosks can be a simple and convenient way for consumers to access CVC, scammers and other illicit actors can also exploit their simplicity and convenience,” FinCEN stated.
According to the Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3), criminals engaged in fraud schemes often direct victims to use a CVC kiosk to send payments under false pretenses.
“In 2024, the FBI’s IC3 received more than 10,956 complaints reporting the use of CVC kiosks, with reported victim losses of approximately $246.7 million. This represents a 99% increase in the number of complaints and a 31% increase in reported victim losses from 2023,” FinCEN stated.
The Federal Trade Commission likewise identified, based on an analysis of consumer reports, that fraud losses through CVC kiosks have skyrocketed.
FinCEN, through analysis of Bank Secrecy Act (BSA) information, has observed that CVC kiosks have also been used to launder suspected drug proceeds, the agency said.
“The Drug Enforcement Administration reports that transnational criminal organizations (TCOs) such as Cartel Jalisco Nueva Generación are increasingly adopting CVC because it enables rapid international funds transfers. In areas that face a significant drug-related threat and that have a significant number of CVC kiosks, TCOs may launder money through CVC kiosks as an alternative to bulk cash smuggling,” FinCEN added.