Overview

• FinCEN issued an official alert on August 4 advising financial institutions to monitor convertible virtual currency kiosks for fraud, cybercrime and drug-trafficking money laundering
• The guidance lists red-flag indicators such as high-frequency transactions across locations, customer behavior inconsistent with prior patterns and third parties accompanying kiosk users
• Treasury underscored that failures by kiosk operators to meet Bank Secrecy Act obligations heighten the risk of illicit conversions into cryptocurrencies
• Scammers are leveraging tech support and bank-impersonation schemes at kiosks to trick seniors into withdrawing cash and depositing it into digital-asset machines
• The advisory builds on global measures including the U.K. Financial Conduct Authority’s seizure of illegal crypto ATMs and New Zealand’s call for a nationwide kiosk ban