Americans lost $333 million to crypto ATM fraud last year alone. That staggering number sits at the heart of why Bitcoin Depot, the country’s largest Bitcoin ATM operator, recently made a major change in the way it does business — one that affects every single person who comes to one of its machines.
Starting this February, the company began rolling out a requirement for customers to show identification before completing any transaction, not just when signing up for the first time. No ID, no Bitcoin. It’s that simple.
A History of Partial Steps
It’s not like Bitcoin Depot hadn’t tried to deal with fraud before. Back in October 2025, the company introduced identity checks for new users joining the platform. But returning customers? They can continue to act without further processing. Critics say the loophole was wide enough for bad actors to step in — and the numbers suggest they did just that.
FBI data on crypto ATM-related fraud losses last year made it hard to ignore the magnitude of the problem. Fraudsters, many of whom target American adults, have carried out a disturbing process: they teach victims to deposit money in Bitcoin ATMs under false pretenses – fake government notifications, phone calls supporting fraudulent technology – and then disappear when the money runs out. Because Bitcoin transactions cannot be reversed, victims are almost always left with nothing.
Legal Heat In all directions
Bitcoin Depot has not only faced negative headlines. It has been dealing with lawyers. Massachusetts Attorney General Andrea Campbell filed a lawsuit against the company this month, saying it knowingly allows crypto scams to occur while stripping fraud protections.
Campbell’s office asked the court to stop Bitcoin Depot from accepting any transactions over $10,000 unless additional fraud prevention measures are taken.
Maine told a different story – with a price tag. The company reached a $1.9 million settlement with the country’s consumer credit bureau after agreeing to repay the money to the fraudsters. And the Iowa Supreme Court ruled, somewhat controversially, that Bitcoin Depot was legally allowed to store fraudulent deposits, as customers must verify that they own the receiving wallet.
According to reports, at least 17 US states have now passed laws calling for better protections for crypto ATMs, including daily spending limits and clear fraud warnings posted on the machines.
9,000 Machines, One New Rule
The reach of Bitcoin Depot is huge. Reports say that the company operates more than 9,000 kiosks across North America, making it the dominant player in the US market which accounts for 78% of all Bitcoin ATMs worldwide – more than 31,000 machines in total, based on data from Coin ATM Radar.
CEO Scott Buchanan touted the new ID policy as a security upgrade, not just a legal shield. “By requiring identity verification for all transactions, we are taking an extra step to strengthen security, protect customers, and maintain the integrity of our services,” he said.
The company says continuous verification will allow it to flag suspicious behavior tied to specific customers, locations, or amounts before a job is approved.
Featured image from Unsplash, chart from TradingView
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