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Scammers posing as local law enforcement talked a Johnston County, North Carolina, woman into feeding thousands of dollars into a gas-station crypto ATM, leaving her, in her words, with no savings. The case, reported by WRAL on October 20, lands as North Carolina prepares to cap deposits and mandate fraud refunds at kiosks from 2027.
The woman, who spoke to WRAL but requested anonymity, believed she needed to make a payment to secure her release from a situation described by the callers. After transferring thousands of dollars through a cryptocurrency ATM at a gas station, she was asked to send another $4,000.
Unable to meet the additional demand, she told the callers she had no money left. The call subsequently disconnected, leaving her to realize that she had lost what she described as her entire savings.
The financial damage has also affected her emotional well-being. “I just set up an appointment with a counselor, so I’d have somebody to talk to, because it’s really hurt me financially and hurt me mentally,” she told WRAL.
Her experience highlights the risks associated with cryptocurrency kiosks, which allow users to convert cash into digital assets. Although these machines can facilitate legitimate transactions, fraudsters increasingly exploit them to collect payments from victims who believe they are dealing with law enforcement officials, government agencies or other trusted institutions.
The Johnston County case is part of a broader pattern of cryptocurrency kiosk-related fraud across the United States. According to public records from neighbouring Harnett County cited by WRAL, another victim recently lost more than $30,000 through a cryptocurrency machine, an amount described in the records as almost all of his savings.
A Crypto ATM scam can be particularly damaging because transactions are generally processed quickly, and cryptocurrency transfers can be difficult to reverse once completed. Criminals exploit these characteristics by pressuring victims to act immediately, leaving little time to verify the legitimacy of payment demands or seek advice from financial institutions.
The Federal Bureau of Investigation began publicly reporting statistics on cryptocurrency kiosk-related complaints in 2023. That year, the agency recorded approximately 5,500 complaints involving these machines, with reported losses exceeding $189 million.
The figures increased substantially by 2025. The FBI reported 13,460 complaints related to cryptocurrency kiosks, representing approximately $389 million in losses.
The increase reflects growing concerns about the use of digital asset infrastructure in financial crimes. While the figures do not establish that every cryptocurrency kiosk transaction is suspicious, they demonstrate the scale of losses reported by victims who used the machines.
The Federal Trade Commission has also highlighted the growth of fraud involving Bitcoin ATMs. Data from its Consumer Sentinel Network, cited in the WRAL report, indicates that fraud losses associated with the machines rose nearly tenfold between 2020 and 2023.
These developments have prompted policymakers to consider stronger safeguards, including transaction limits, clearer warnings, improved customer verification and mechanisms for addressing fraudulent transfers.
North Carolina lawmakers have approved House Bill 920, which introduces new regulatory requirements for the state’s Bitcoin ATM industry. The legislation was introduced by Republican State Representative Neal Jackson and is scheduled to take effect in 2027.
The measure requires cryptocurrency kiosk operators to obtain licences under the state’s Money Transmissions Act and places them under the supervision of the Commissioner of Banks. It also establishes requirements for fraud warnings, transaction receipts, customer support, compliance personnel and consumer protection officers.
One of the legislation’s central provisions concerns refunds for certain fraudulent transactions. Under specified conditions, operators must return the full dollar amount deposited when a transaction is determined to be fraudulent and the victim reports it within 30 days. The precise refund entitlement depends on the circumstances and the customer’s status under the law.
The legislation also introduces daily transaction limits intended to reduce the amount consumers can lose while interacting with unfamiliar services. New customers will be limited to $2,000 per day during their first 30 days, while the subsequent limit will be $5,000 per day.
North Carolina Attorney General Jeff Jackson believes the limits could provide a significant layer of protection against fraud. However, he has questioned whether cryptocurrency kiosks provide sufficient legitimate value to justify their continued presence in the state.
“We don’t think there is any legitimate use for these devices. They are overwhelmingly used for fraud. If you want to invest in Bitcoin, you can do that without paying the 12% overhead. You don’t have to do that through a gas station. If you want to send money to somebody, you can do that through a bank. There is no reason to go to one of these machines,” Jackson told WRAL.
His comments reflect a more restrictive position on the industry, particularly as consumers continue to report substantial losses linked to cryptocurrency kiosk transactions.
Jackson also confirmed that federal scrutiny of the industry is ongoing. When discussing the Department of Justice’s attention to cryptocurrency kiosk companies, he told WRAL: “Investigation underway as we speak.”
The statement indicates that investigations are in progress, but the report did not identify specific companies facing enforcement action or provide details about the scope of the DOJ inquiry.
State Representative Tim Longest, a Democratic lawmaker from Wake County and a consumer protection lawyer, has similarly questioned whether the new requirements go far enough to address the risks.
“I think that we should really question whether these regulations go far enough and if these machines really serve any legitimate purpose,” Longest said. “You don’t go to put cash in a machine and take out a stock, and yet a stock is exactly the same kind of speculative asset that cryptocurrency is.”
Cryptocurrency kiosk operators have generally supported some consumer protection measures but raised concerns about the financial and operational consequences of North Carolina’s new requirements.
David Tente, executive director of the ATM Industry Association, challenged the suggestion that most cryptocurrency kiosk transactions are fraudulent.
“Only a tiny percentage of those transactions are fraud,” Tente told WRAL by email.
Tente also questioned the legislation’s refund provision, arguing that the 30-day return requirement could make operating in the state less attractive to cryptocurrency kiosk providers.
The debate illustrates the competing priorities facing regulators: preventing fraud and protecting consumers while determining whether compliance requirements could force legitimate businesses to withdraw from the market.
Byte Federal and CoinFlip, two operators with kiosks in North Carolina, told WRAL that they already provide several protections included in the new legislation. These measures include fraud warnings, live customer support, suspicious-wallet screening and compliance programmes.
Byte Federal, which operates 36 kiosks in the state, said it plans to update its interactive fraud warnings, receipts and transaction procedures to comply with the new requirements. The company also expressed support for a 48-hour hold on transactions made by brand-new customers, arguing that the delay could provide an opportunity to identify and stop a scam before funds are transferred.
However, Byte Federal warned that the legislation’s 12% fee cap could make it difficult for operators to sustain their compliance and fraud-prevention systems. The company said it would comply with the law’s refund provisions while arguing that kiosk operators should not be treated differently from banks when customers voluntarily authorise payments after being deceived.
CoinFlip, which operates 152 kiosks across North Carolina, said it already offers several protections, including customer support, scam warnings and technology designed to identify suspicious digital wallets. The company also confirmed that it holds a North Carolina money transmitter licence, obtained in May 2024, and does not currently plan to reduce its kiosk network because of the new legislation.
Both companies said they would implement the additional measures required when the law takes effect. Their existing policies also include procedures for reviewing reported scams and cooperating with law enforcement.
CoinFlip said it provides transaction-fee refunds to confirmed scam victims under its current policy, with requests assessed individually. It added that investigators may be able to trace cryptocurrency movements through publicly recorded blockchain transactions, although tracing does not guarantee that stolen funds will be recovered.
The regulatory debate comes as authorities confront a difficult problem: cryptocurrency transactions can be legitimate and useful, but their speed and potential irreversibility make them attractive to fraudsters.
In a typical impersonation scheme, criminals contact victims by telephone and claim to represent law enforcement or another authority. They may threaten arrest, invent an urgent legal problem or demand immediate payment to prevent an alleged consequence. Victims are then instructed to deposit cash into a cryptocurrency kiosk and transfer the resulting digital assets to a wallet controlled by the criminals.
A Crypto ATM scam often relies more on psychological pressure than technical sophistication. By creating fear and urgency, fraudsters can persuade victims to bypass ordinary verification procedures and transfer money before discovering that the caller’s identity and claims were fabricated.
Consumers should therefore be cautious whenever an unexpected caller demands cryptocurrency payments to resolve an arrest warrant, avoid prosecution, pay a government fee or protect funds from an alleged threat. They should independently contact the relevant institution through an official telephone number rather than relying on contact details supplied by the caller.
Anyone who suspects fraud should stop the transaction if possible, contact the kiosk operator immediately, preserve receipts and wallet addresses, and report the incident to law enforcement. Quick reporting may improve the chances of interrupting a pending transfer, although completed cryptocurrency transactions cannot generally be reversed through a simple chargeback.
North Carolina’s new rules are intended to create additional safeguards, but their effectiveness will depend on implementation, enforcement and the willingness of operators to comply. The DOJ’s reported investigation could also influence how the industry is regulated, although no specific enforcement outcome has been established in the information published by WRAL.
For victims such as the Johnston County woman, the consequences extend beyond the immediate financial loss. Rebuilding savings can take years, while the emotional effects of being deceived may persist long after the incident.
As federal complaints continue to mount and states reconsider their approaches to cryptocurrency kiosks, the central challenge remains preventing consumers from losing money to fraudulent payment demands. Whether stronger oversight, transaction limits and refund requirements can substantially reduce Crypto ATM scam losses will become clearer as North Carolina’s law takes effect in 2027.
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