A New Twist on An Old Scam
as with many other technological advancements, criminals have found a way to harness the benefits of BTMs to more conveniently and anonymously scam and defraud the public. In 2024, the FBI received nearly 11,000 complaints relating to CVC kiosk fraud activity, with estimated victim losses of approaching $250 million, and in 2023, CVC kiosk fraud accounted for almost 50% of the total losses experienced related to financial crimes. And to get some idea of how fast the problem is growing, consider the fact that reported BTMs in the U.S. have increased from 4,250 at the start of 2020 to 30,647 as of August 4 of this year, according to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). So how does BTM fraud work? Typically, scammers using CVC kiosks will initiate contact with a potential victim by means of an unsolicited phone call, claiming to be the victim’s bank calling about an unauthorized charge, a government agency demanding past due taxes, or as already mentioned a customer service agent from a tech provider reporting a detected computer virus. According to Chief Reimer, scammers are becoming more and more creative in the way they victimize. They’ve begun to target a wide variety of individuals in a complex network of scams that often last weeks, months, or sometimes years. “Oftentimes, we see ‘romantic’ scams, in which suspects communicate with their victims for months at a time, striking up a ‘romantic relationship’ over the internet. Victims never meet their scammer in person, and all communication is done electronically. These scammers will then request funds to be transferred to them electronically via PayPal, a cash app, or cryptocurrency,” said Chief Reimer. As with other forms of scam activity, the elderly are especially susceptible. Criminals targeting older individuals are particularly likely to direct victims to use BTMs as a transfer vehicle. According to Federal Trade Commission data, people aged 60 and over were more than three times as likely as younger adults to report a loss using a BTM, and more than two of every three dollars reported lost to fraud using BTMs was lost by an older adult. Not unlike other forms of cybercrime, investigating BTM fraud is incredibly challenging at best. “The most significant challenge is obtaining any sort of restitution for the victims. Scammers are using cryptocurrency because they can quickly and easily transfer funds from one ‘wallet’ to another,” said Chief Reimer. “They continue to shuffle this money around and evade law
Imagine this. The phone rings, and your elderly mother or grandmother answers. On the other end is a “customer service agent” for a well-known technology company, indicating that a virus has infected grandma’s computer and payment is required to take care of the issue. Per the “agent’s” instructions, she goes to a local convenience store, inserts her credit card into a BTM, purchases the required amount of CVC, and sends it to the “agent’s” virtual wallet. Done. Problem solved, right? Sadly, no, because while there never was a problem to begin with, there sure is one now. So, what exactly is a BTM and what is this CVC? Let’s start with the latter. According to the IRS, Convertible Virtual Currency, or CVC, is a “digital asset that has an equivalent value in real currency, or acts as a substitute for real currency, that can be used to pay for goods and services.” And a BTM, (or CVC/Cryptocurrency Kiosk), is a fixed machine typically placed in a heavily trafficked location that allows users to engage in various cryptocurrency-related transactions. BTMs operate similarly to ATMs, but with a few distinct differences. While a traditional ATM allows customers to withdraw or deposit cash from a bank account, BTMs enable customers to both buy and sell CVC from a virtual wallet. Additionally, BTM transactions are incredibly fast and because sent funds are instantly owned by the receiver, reversing these transactions can be very difficult unlike ATM transactions or wire transfers which may remain in pending status for a day or two. Interesting information, but BTMs are likely only found in large cities, right? Quite the contrary, actually. According to the WI Department of Financial Institutions, there are now an estimated 1,000 BTMs around the state. In prepping for this article I reached out to a number of police chiefs in smaller cities across the state, the majority of which reported having BTM’s in various locations throughout their cities. “We have about a dozen kiosks in Pleasant Prairie, but we anticipate additional locations as this form of currency continues to gain popularity,” said Chief David Smetana of the Pleasant Prairie Police Department. And Chief Nick Reimer of the Manitowoc Police Department added “Currently, our city has approximately five cryptocurrency kiosks. These kiosks are located primarily within gas stations. Prior to our ordinance, we had around12.” So, if BTMs are fast, efficient, and designed to make our financial lives easier, what is the problem? The issue is that
The Municipality - October 2025 | 9
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