Cash in, fraud out: Criminals target bitcoin ATMs as crypto popularity surges

“There is crime. It’s never going to stop. This is just a new medium that has happened and that is happening, and we have real data that it is happening. And we want to work together to stop it,” he added.

Grens said companies should not allow transactions with just a phone number for up to $900.

Executives at CoinFlip, another major crypto ATM operator based in Chicago, say the $900 threshold is not an issue. The company allows crypto purchases of up to $900 with just a name and phone number. Higher amounts require additional identification.

CoinFlip CEO Ben Weiss said the company has a risk-based tier approach depending on the amount of crypto a customer buys.

“At every single level, there’s additional pieces of KYC [know your customer] that are required,” he said.

In addition, Weiss said the company uses blockchain analytics tools to detect fraud. Crypto wallets associated with nefarious activity are blocked.

“The same way it shows where bitcoin is going, it also shows where bitcoin is coming from. That’s the cool thing about bitcoin being a public ledger,” he said.

Weiss said asking for just a phone number for transactions below $900 allows more potential customers to buy crypto.

“You have to have an approach an AML [anti-money-laundering] KYC approach that’s commensurate with the risk, and for lower transactions, we don’t want to disenfranchise people,” Weiss said. “We want everyone to be able to buy $50, $100, $200 of bitcoin, regardless of their immigration status and regardless if they have an ID.”

Weiss said that “everyone in the industry, especially us, want to do our part to make sure this is the cleanest industry possible.”

Article source: https://www.cnbc.com/2021/11/09/bitcoin-atms-criminals-target-cryptocurrency-transactions.html