In Brief:
- The FBI warned about increasing cases of fraudulent schemes related to crypto ATM and QR codes.
- The warning focuses on various fraudulent schemes responsible for victims’ financial loss and certain guidelines to avoid such frauds.
The Federal Bureau of Investigation (FBI), has published a public service announcement concerning increased crypto ATM and QR code fraud. The FBI’s warning, published on November 4, emphasizes the presence of “scammers” targeting cryptocurrency ATM and QR code in order to compromise victims’ crypto funds.
A QR code is a square barcode with information that is readable via a smartphone camera. An individual can scan the QR code of the concerned recipient to auto-populate the recipient field for easy transactions. The issue arose from the Internet Crime Complaint Centre which has reported a “surge in scammers”.
Many incidents of malicious use of QR codes have recently surfaced along with various fraudulent schemes to receive payments from victims. Such schemes include online impersonation (scammer falsely identifies as government, law enforcement, a utility company or a legal office), romance schemes (scammer establishes an online relationship with a victim), and lottery schemes. Regardless, several tactics used to manipulate a victim to withdraw money from the victim’s financial accounts using cryptocurrency ATM and QR code appear similar.
The scammers provide a QR code associated with the scammer’s crypto wallet for the victim to use during the transaction. The scammer then directs the victim to a physical crypto ATM to deposit money, purchase cryptocurrency and use the provided QR code to auto-populate the recipient address. This is done through online communication with the victim explaining step-by-step instructions until the payment is completed.
Once a victim completes a payment, the recipient instantly gets hold of cryptocurrency, and often instantly transfers the funds into an overseas account.
Cryptocurrency’s decentralized approach has numerous advantages but the challenges make it difficult to realize its potential. This sort of decentralized payments method differs from traditional bank transfers or wires where a payment transaction can remain pending for a day or two before settlement. This also makes law enforcement’s recovery of the funds difficult and can leave many victims with a financial loss.
The FBI has also shared tips to avoid such frauds in this public service announcement. The US federal agency has always come forward in various instances of frauds and scams. This year, the US FBI helped in the mirror trading international scam.
