Det. Sgt. Ray Aceti has intervened twice to prevent scam victims from falling prey to fraudsters at crypto ATMs, saving them from losing thousands of dollars. The first incident occurred around five years ago when a recent immigrant almost lost his life savings after being manipulated by a fraudster over the phone. Aceti’s timely warning prevented the victim from making a disastrous transaction.
The second incident took place in January following Aceti’s campaign to raise awareness about crypto ATM scams. The initiative involved placing fraud warning posters near 85 machines in the region. Niagara Regional Police have received reports of over $3.1 million in fraud losses through crypto ATMs since 2020, with nearly $1.4 million reported last year alone.
While some Canadian authorities, including the RCMP and Ontario Provincial Police, have put up cautionary posters, there is a lack of specific regulations governing the crypto ATM industry in Canada. Despite operating legally, FINTRAC, Canada’s financial intelligence agency, has identified crypto ATMs as a primary tool for fraudsters to exploit victims, contrasting with measures taken by peer countries to regulate these machines.
Det. Aceti and other stakeholders in law enforcement, fraud victims, and industry insiders have called for stricter regulations or even a ban on crypto ATMs to combat fraudulent activities. In the U.K., crypto ATM bans have been enforced through licensing restrictions, and New Zealand is considering similar measures. Australia has introduced daily transaction limits following an investigation that revealed a high percentage of fraud victims using these machines.
In the U.S., several states have enacted laws to impose restrictions on crypto ATMs, such as transaction limits and fee caps. However, Canada has yet to follow suit, prompting calls for action from government officials and regulatory bodies. Despite the lack of specific regulations, existing federal laws mandate crypto ATM operators to register with FINTRAC, report large transactions, and adhere to KYC rules.
With Canada hosting the second-highest number of crypto ATMs globally, industry operators have differing views on potential regulations. While some support limitations on transactions to enhance consumer protection, others argue against measures like capping transaction fees due to the operational costs involved. Public education remains crucial, emphasizing that government and law enforcement will never request cryptocurrency transfers.
Det. Aceti’s proactive approach, including engaging with store owners to educate them on spotting potential scams at crypto ATMs, reflects efforts to combat fraudulent activities. By raising awareness and advocating for tighter regulations, stakeholders aim to safeguard individuals from falling victim to crypto ATM scams.
