The U.S. agency issues an alert about money laundering and scams targeting the elderly through cryptocurrency ATMs.
On August 4, the Financial Crimes Enforcement Network (FinCEN), the U.S. agency responsible for safeguarding the financial system from terrorism and money laundering, issued a public advisory addressed to financial institutions. The alert concerns the illicit use of crypto ATMs by criminal actors to carry out a variety of unlawful activities.
The warning specifically highlights the use of these machines for laundering proceeds from drug trafficking and for carrying out scams targeting elderly individuals.
According to FinCEN, citing information from the Drug Enforcement Administration, high-level criminal groups, such as the Jalisco New Generation Cartel, are increasingly leveraging crypto ATMs to support their illegal operations.
Andrea Gacki, Director of FinCEN, stated:
“Criminals are relentless in their efforts to steal money from victims, and they’ve learned to exploit innovative technologies like CVC kiosks (crypto ATMS).”
Compliance issues
One of the agency’s key concerns is the widespread non-compliance among many crypto ATM operators. According to FinCEN, these operators often fail to properly verify customer identities, creating vulnerabilities in the financial system that can be exploited by bad actors.
The advisory further notes that “these non-compliant CVC kiosk businesses also often lack reasonably designed policies, procedures, and internal controls to respond to requests from law enforcement.”
Last February, Senator Dick Durbin of Illinois introduced a bill aimed at establishing specific requirements for crypto ATM operators, including transaction limits and a mandate to provide consumers with clear warnings about potential fraud risks.
