This was not only less convenient, it was inherently dangerous. Meeting up with a stranger to exchange significant amounts of money? Better choose a public place.
Cryptocurrency ATMs eliminate the risk of meeting strangers when transacting money for cryptocurrencies. So what risks still exist? What security considerations still apply to cryptocurrency ATMs?
Physical security
Cryptocurrency ATMs are like real estate in one sense: location, location, location.
Many BTM owners make a point of locating their machines in well-lit areas, monitored by security cameras, with staff members nearby to act as witnesses or potentially intervene in an emergency.
Under these circumstances, your physical security at a cryptocurrency ATM is no different than a normal ATM under the same circumstances.
But carrying cash is inherently risky, and petty criminals know that people who stop at ATMs — Bitcoin or otherwise — often have cash on them or will soon.
Take the usual precautions and exercise common sense if you are considering using a Bitcoin ATM located in a high crime neighborhood, placed in a dark or secluded location with no witnesses or security cameras nearby.
Fraud
A case of transactional fraud at a cryptocurrency ATM would involve an unauthorized person accessing your account under false pretenses, presumably to sell cryptocurrency from your wallet and walk away with cash.
The first and most important consideration in preventing BTM fraud is to carefully protect your cryptocurrency wallet ID and credentials. If hackers get this information, they could try to make fraudulent withdrawals at a BTM.
However, some cryptocurrency ATMs have measures in place to prevent this, including photo ID verification, selfie capture, and two-factor authentication. Some BTMs ask you to verify your mobile phone number and then send you a one-time code via SMS to enter into the BTM before proceeding.
BTMs also maintain a transaction log that can be accessed by authorities. This violates many users’ sense of crypto-anonymity, but allows the BTM owner to comply with KYC (know your customer) and AML (anti-money laundering) laws.
Mobile wallet security
Forget for a second about the risk of a scammer stealing your crypto wallet credentials. What happens if you, the authorized user, make a transaction? Can a cybercriminal get between you and your crypto transaction and get up to mischief?
Trusted BTM developers invest heavily in the security of their software and network connections, including end-to-end encryption, best-in-class malware protection, and multi-factor authentication. Accessing a cryptocurrency exchange through a BTM is as secure, if not more so, than accessing the same exchange online.
In 2018, a cybersecurity company discovered an ad that purported to sell malware to hack cryptocurrency ATMs for $25,000. The malware aimed to disconnect the cryptocurrency ATM from its network and bypass its security procedures, causing it to dispense cash without loading a cryptocurrency wallet.
The inventor of the cryptocurrency ATM categorically denied the credibility of this claim, stating that there was no such vulnerability. However, even if it existed, the party at risk is not the user, but the owner of the BTM who loses the money from his machine. Even if a cybercriminal were able to withdraw cash without loading a cryptocurrency wallet, the user would not be affected as no one’s wallet would be emptied.
The safest way to buy Bitcoin
PayDepot Bitcoin ATMs are the safest way to buy Bitcoin using cash. Our machines adhere to the highest standards of digital security and privacy in compliance with local, state, national and international regulatory controls.
Our ATMs require users to create an account, authenticate their identity and verify their mobile wallet credentials via manual entry or QR code. All PayDepot Bitcoin ATMs are located in a well-lit, high-traffic public location, so you can easily manage your personal security while carrying cash.
If something unforeseen happens, the PayDepot team is here to help you out — you can count on the highest rated customer support team in the cryptocurrency development company.
