Security

Bitcoin Depot takes the lead on preventing crypto fraud

Bitcoin Depot is taking the lead in fighting crypto ATM/kiosk fraud. Will it be enough?

Photo: Chinnapong - stock.adobe.com

March 10, 2026 by Richard Slawsky

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As regulatory scrutiny intensifies around cryptocurrency ATMs and reports of fraud continue to draw attention from lawmakers, Bitcoin ATM operator Bitcoin Depot has introduced a new compliance policy designed to strengthen identity verification and prevent misuse. The company has begun a phased rollout requiring customers to provide identification for every transaction at its kiosks, a move it says represents a significant advancement in fraud prevention and consumer protection.

The policy, which began rolling out in February 2026, applies across Bitcoin Depot's U.S. ATM network and expands its existing Know Your Customer (KYC) procedures. The company says it is the first major operator in the crypto kiosk sector to require identity verification for every transaction rather than only during initial account setup.

Bitcoin Depot operates more than 9,000 crypto kiosks worldwide and maintains the largest market share among bitcoin ATM providers in North America. The company has kiosks in 47 U.S. states, with additional access provided through its BDCheckout service at thousands of retail locations. With BDCheckout, crypto buyers can begin a purchase transaction via the Bitcoin Depot mobile app. The app generates a barcode, which can be scanned by a store cashier who collects the payment. Once the purchase is complete, buyers receive funds in their crypto wallet

The size of Bitcoin Depot's network makes its compliance decisions particularly significant for the broader crypto kiosk sector. Other operators will likely view the company's policies as indicators of developing standards that may influence future regulatory expectations and shape the policies of competing providers.

The move reflects growing pressure on the crypto kiosk industry to address security concerns, particularly amid reports of scams involving crypto kiosks. Operators, regulators and consumer advocates have raised concerns about the use of those kiosks in schemes targeting older adults and first-time cryptocurrency users, prompting calls for stronger safeguards, clearer disclosures and enhanced monitoring.

Common scams involve victims receiving a call claiming they will be arrested or that their utilities will be shut off unless they visit a nearby kiosk to purchase cryptocurrency such as Bitcoin. The scammer then transfers that cryptocurrency to their own digital wallet and are never heard from again.

At least 17 states have passed laws strengthening consumer protections related to crypto kiosks, according to the AARP, with several considering outright bans on the devices. Scams involving crypto kiosks led to more than $333 million in losses in 2025, according to FBI data. In a vast majority of cases, victims were aged 60 or older. Losses per victim typically average around $10,000.

Strengthening identity controls

The enhanced policy builds on Bitcoin Depot's earlier "first-transaction ID verification" requirement, which verified users only during initial onboarding. By extending verification to repeat transactions, the company aims to strengthen transaction monitoring and enable real-time detection of irregular behavior, saying continuous verification adds a layer of protection designed to help prevent account sharing, identity theft, and unauthorized account access.

"With this new policy, we're not only working to continue our mission of making digital assets more accessible, but striving to enhance safeguards for our customers as the market continues to evolve and mature," Bitcoin Depot CEO Scott Buchanan told Kiosk Marketplace via email. "Verifying identity at each transaction is one way we can help ensure customers maintain control over how their accounts are used."

The change also reflects a broader shift toward stronger authentication protocols in unattended retail environments handling financial transactions. Similar trends are emerging across sectors such as self-service banking, ticketing and digital payments, where operators are implementing biometric verification, identity checks and advanced monitoring systems to reduce fraud risk.

Balancing access and security

While enhanced verification may strengthen consumer protections, it also highlights a central tension in the crypto kiosk market: balancing accessibility with regulatory compliance. Bitcoin kiosks were originally promoted as a way to provide financial inclusion for individuals who rely on cash or lack traditional banking access. Additional identity requirements may introduce friction into the user experience, but operators increasingly view these measures as necessary to maintain trust and regulatory acceptance.

Bitcoin Depot positions the update as part of its broader mission to connect cash users to the digital financial system while maintaining high compliance standards. The company says the enhanced safeguards will help protect customers and address misuse by bad actors as the digital asset industry continues to mature.

"Bitcoin Depot has always prioritized compliance and consumer protection, and it's crucial to our operations that we demonstrate proactive leadership in preventing fraud and building trust with our customers," Buchanan said in a statement when the policy was announced. "By requiring identity verification at every transaction, we are taking an additional step to strengthen security, protect customers, and maintain the integrity of our services."

For the industry in general, the development highlights a continuing shift toward increased security in kiosk design, particularly in sectors involving financial transactions. Whether other crypto kiosk operators will adopt similar per-transaction verification requirements remains to be seen.

About Richard Slawsky

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