(KTLA) – When you think of buying or selling cryptocurrency, you might think of high-tech trading floors. Maybe you’re thinking of state-of-the-art apps.
What you probably don’t think about is an ATM in a convenience store at a gas station or in a payday loan store.
Increasingly, however, this is how many working-class people encounter crypto. And consumer advocates say this may not be a good thing.
“These ATMs are being placed in places where retail consumers who don’t have much information about investing but are excited about cryptocurrency and want to get involved are most likely to find them,” said Mark Hays, senior policy analyst for the advocacy group Americans for Financial Reform.
There are approximately 2,000 crypto ATMs in Los Angeles, mostly dealing in Bitcoin. They allow people to exchange dollars for digital currency – for a fee of about 15%.
It’s not that there’s anything wrong with investing in Bitcoin or any other cryptocurrency. It’s just that it’s risky. Very risky.
Remember the “Fortune Favors the Brave” commercial for Crypto.com with Matt Damon? Since the ad debuted last October, Bitcoin has fallen in value by around 60%.
In other words, if you invested $1,000 following Damon’s advice, you would now have maybe $400 to show for it.
“This is kind of weird,” Anas Elshahawy, a cashier at a Crenshaw District convenience store, told KTLA.
He said about half a dozen people use the store’s Bitcoin machine each week.
Crypto ATMs can be used to transfer money abroad, especially to El Salvador, which made Bitcoin a national currency.
Critics said they are also used by drug dealers and fraudsters to launder money.
The industry says the machines allow people without bank accounts to dabble in digital currencies.
“We are well aware that there is a belief that only criminals use it, that only malicious activity and fraud victims go to ATMs,” said Seth Sattler, executive director of the Cryptocurrency Compliance Cooperative, an industry group.
“So as an industry we are actively trying to prevent this to the best of our ability.”
Hays of Americans for Financial Reform said there may not be anything untoward about most crypto transactions. But he emphasizes that largely unregulated digital currencies are often more like gambling than investment.
“Putting your money in a Bitcoin ATM and hoping you’ll see the line go up and make bank is the equivalent of walking into a casino,” he said. “Sure, you can make some money. But the odds are usually stacked against you.”
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