98% of crypto ATM scams highlight fraud risks for seniors

A surge in digital asset fraud, fueled by advanced artificial intelligence (AI) tools and cryptocurrency ATMs, is targeting retail investors in the U.S., particularly seniors.

Claire McHenry, deputy director of the Nebraska Department of Banking and Finance and president of the North American Securities Administrators Association (NASAA), is set to address these concerns before the Securities and Exchange Commission (SEC) Investor Advisory Committee on March 6.

McHenry's testimony highlights a significant increase in crypto-related financial fraud, with AI tools making scams more convincing and difficult to detect.

The NASAA 2024 Enforcement Report shows that digital assets were involved in more investigations and enforcement actions than any other financial product or scheme, including stocks and Ponzi (CRYPTO:PONZI) schemes.

Most financial fraud involves cryptocurrency ATMs, where scammers convince victims to deposit cash and collect it in cryptocurrencies.

In Nebraska, a staggering 98% of transactions through one crypto ATM company were linked to scams.

McHenry emphasises the need to shift from "tips and tricks" to media literacy to combat these scams.

She also notes that victim-blaming language can discourage reporting, urging regulators to focus on the perpetrators rather than the victims.

Older Americans are disproportionately affected due to accumulated wealth and limited technological knowledge, making them prime targets for tech support and investment scams.

McHenry stresses the importance of regulatory collaboration, AI fraud detection, and investor education to protect Americans from these evolving threats.